An analyst named TechDev claimed on Twitter that the dominant chart of Bitcoin (BTC) is signaling a major bearish reversal.
The Bitcoin dominance index (BTC.D) measures the market capitalization of the largest cryptocurrency compared to the rest of the crypto market. The bearish trend observed in BTC.D suggests that altcoins are preparing to surpass Bitcoin.
TechDev noted that the BTC.D chart shows a bearish divergence on the five-day timeframe, indicating that Bitcoin’s dominance is weakening in favor of altcoins.
The five-day bearish divergence building on Bitcoin dominance suggests that the asset is ready for its biggest decline in four years. For those new to this area, welcome to the bottom of the second altcoin wave… People often wonder if there will be an altcoin season. Just wait for the third wave.
Read more:
Bitcoin continues to fall: What should we focus on this week?
The analyst used Elliott Wave Theory, which states that a bullish asset usually follows a five-wave pattern, with waves one, three, and five being upward movements, while waves two and four are corrections. According to the theory, the third wave is usually the longest and most significant during a rally.
To support their optimistic forecast for altcoins, TechDev shared an eight-week chart of the OTHERS index, which tracks the market capitalization of all cryptocurrencies except the top ten digital assets and stablecoins.
The chart shows that OTHERS is once again testing its exponential moving average (EMA) as support, a pattern similar to those observed in the early stages of bull markets in 2017 and 2020.
Based on the chart shared by TechDev, the EMA appears to be around $200 billion. Currently, the OTHERS index is valued at approximately $220.577 billion.