Altcoin Dominance Signals Potential Breakout as Bitcoin Faces Resistance

Bitcoin dominance has been on the rise since early 2023, but it recently encountered resistance at the 58% mark. This level has historically acted as a resistance zone during previous altcoin seasons. Analyst Batman noted that this area has been a significant barrier in the past, and a rejection from this zone could signal the start of another altcoin season. The current price formation indicates a rising wedge, which is typically a sign of trend reversals. If Bitcoin dominance is rejected from this zone, it could lead to a rotation of capital into altcoins, reinforcing the potential for an altcoin breakout.

As Bitcoin dominance approached its peak, altcoin dominance showed signs of reversal. Analyst Javon Marks observed bullish divergences on the weekly chart, where the price action formed lower lows, but the RSI and MACD produced higher lows. This divergence suggested that the downward trend was slowing, and buyers were becoming more active. The RSI was moving upward despite declining prices, and the MACD lines were converging, with histogram bars thinning out. These indicators pointed to a potential fading of downside pressure on altcoins. If altcoin dominance breaks out of its downtrend, it could mark the beginning of a broader altcoin rally, often the first sign before rotation appears on price charts.

Another key area of interest is the total altcoin market capitalization chart, which has formed a symmetrical triangle since late 2021. The price has now reached the top of the triangle, indicating an imminent breakout. Historically, this pattern has been followed by an instant altseason after overcoming resistance. If the top boundary of the triangle is breached with volume, it could trigger an extended rally toward the $1.5 trillion level. Support levels have remained firm since Q4 2022, providing a strong foundation for the next upward move. A weekly breakout close would signal the start of a strong upside phase in altcoin markets, consistent with previous altseason patterns.

Adding to the momentum, analyst DefiWimar identified a golden cross on the altcoin market cap chart. This trend, where the 50-day moving average moves above the 200-day moving average, is typically an indication of a trend change. The latest golden cross, which occurred in early July 2025, is the third such cross by alts. Previous golden crosses in 2017 and 2021 were followed by explosive rallies, with overall altcoin valuations increasing more than tenfold. The current setup provides a significant boost to the altseason narrative, supported by the rejections of dominance and divergence indications. The similarity in the structure and timing of these cross-cycles is notable, as each golden cross moment followed a large Bitcoin pump and a period of altcoin suppression.