Bitcoin Dominance: Dead Cat Bounce or Trend Reversal?
BTC dominance faces key resistance in a potential Dead Cat Bounce pattern. Will it break through or collapse?
- Bitcoin dominance tested the 0.618-0.786 Fib resistance in December and got rejected.
- The pattern resembles Adam & Eve but typically results in a bearish breakdown.
- A second test of resistance is underway—will BTC dominance collapse next?
Bitcoin Dominance: A Critical Turning Point
Bitcoin dominance (BTC.D), which measures Bitcoin’s share of the total crypto market, is at a crucial juncture. Analysts are closely watching a potential Dead Cat Bounce pattern, a deceptive setup that appears bullish initially but often leads to a sharp downturn.
BTC dominance recently tested the 0.618-0.786 Fibonacci retracement zone, a key resistance level. After a rejection in December, BTC.D is now making a second attempt at this zone—potentially the last before a breakdown.
Understanding the Dead Cat Bounce Pattern
At first glance, this pattern may look similar to the Adam & Eve formation, which is typically a bullish reversal signal. However, in the case of a Dead Cat Bounce, the upward movement is a temporary relief rally before a steep decline.
The key factor to watch is whether BTC dominance can break above resistance or get rejected again. A rejection would likely lead to a dominance collapse, indicating that altcoins could start outperforming Bitcoin in the coming weeks.
What’s Next for BTC Dominance?
If BTC.D fails to break resistance and reverses downward, it could signal the beginning of a strong altcoin season, where capital flows into alternative cryptocurrencies instead of Bitcoin. On the other hand, if BTC dominance surges past resistance, Bitcoin could remain the market leader for longer.
Traders should stay focused and watch BTC.D closely, as its next move could dictate the market’s direction in the near future.
