Bitcoin Dominance Surges to 65.75% Altcoins Face Major Rotation Risk

Bitcoin dominance has surged to 65.75%, successfully retesting the 64% support level and targeting the 71.04% resistance zone. This marks a significant shift in the cryptocurrency market, as investors and traders increasingly favor Bitcoin over other digital assets. The dominance index, which measures Bitcoin's market capitalization relative to the total cryptocurrency market, has been a key indicator of market sentiment and trends. As Bitcoin's dominance holds above 65%, altcoins face a major rotation risk, potentially leading to further declines in their values.

The recent market dynamics have been marked by volatility, with several altcoins experiencing notable price drops. This movement underscores the challenges altcoins face in maintaining their value amidst Bitcoin's dominance. The market rotation is not limited to individual altcoins but extends to the broader altcoin sector. AI crypto coins, such as Bittensor (TAO), Near Protocol (NEAR), Render (RENDER), and Artificial Superintelligence Alliance (FET), have experienced significant declines. These assets have lost substantial value over the past month, with TAO, NEAR, RENDER, and FET recording losses of 26%, 23%, 35%, and 25%, respectively. The geopolitical tensions and recent tariff policies have been cited as potential reasons behind these declines.

Market momentum is strongly bullish as Bitcoin dominance pushes through long-standing resistance and sustains monthly higher closes. This momentum has built consistently since Bitcoin dominance rebounded off 57.68% in early 2024. Buyers continue defending breakout zones with conviction, leaving little room for altcoin expansion. The 57.68% level had acted as major support since 2023 and sparked this leg of dominance recovery. As Bitcoin burst beyond 60.20% and 63.96%, the trend became steeper. The clear breakout from the 2021-2023 falling wedge pattern demonstrates structural strength while providing long-term continuation cues.

Bitcoin dominance now targets the 71.04% resistance, last seen during prior altseason tops in 2018 and 2021. If reached, this could usher in a dominance high not seen in over four years. The price structure remains clear: higher highs, higher lows, and no active invalidation zone below 60.20%. The detailed breakdown from Rekt Capital shows the 65%–71% zone as a major psychological battleground for market rotation. This confluence area is pressuring altcoins as liquidity concentrates in Bitcoin-led narratives and ETF speculation. Without reversal patterns, altcoins remain sidelined.

The ascending trendline since 2023 continues to act as dynamic support for Bitcoin’s dominance structure. Every monthly close above this trendline validates bullish control and reduces space for short-term pullbacks. Any failed attempt to break 71.04% could delay upside, but buyers are clearly in command. The 60.20% zone has now flipped from resistance to a confirmed base of support, solidifying Bitcoin’s macro dominance recovery. With investor attention locked on BTC strength, altcoin rotation could remain subdued until dominance weakens meaningfully or reverses from key resistance.

Analysts have noted that a drop in Bitcoin dominance below 62% could signal stronger inflows into altcoins. However, the current trend suggests that Bitcoin's dominance is likely to remain elevated, at least in the short term. This scenario poses a significant risk for altcoins, as investors may continue to rotate out of these assets in favor of Bitcoin. The market sentiment remains mixed, with some experts expressing optimism about a potential rebound for altcoins, while others remain cautious. The ongoing price fluctuations and reduced trading volume have led to a decline in investor participation, further impacting market sentiment. However, some analysts believe that the current dip in altcoins could be a buying opportunity, as the market may be preparing for a future surge.

In summary, the rise in Bitcoin dominance above 65% has led to a significant rotation away from altcoins, posing major risks for these assets. The market dynamics are characterized by volatility and uncertainty, with altcoins facing challenges in maintaining their value. While some experts remain optimistic about a potential rebound, the current trend suggests that Bitcoin's dominance is likely to continue, at least in the short term. Investors and traders should closely monitor the market developments and adjust their strategies accordingly.