Bitcoin Dominance Hits 66% Mark, Altcoins Struggle

Bitcoin dominance has reached a significant milestone, hitting the 66% mark, a level not seen since the peak of the last cycle over four years ago. This resistance level is part of an 8-year trendline that has historically been associated with altcoin recovery phases in past markets. The current market sentiment reflects a peak bearish outlook towards altcoins, mirroring historical patterns observed before major trend reversals in previous cycles.

As Bitcoin dominance continues to climb, altcoins have struggled to keep pace. Over the past several years, capital has steadily flowed into Bitcoin, leading to underperformance in the altcoin market. However, the current resistance zone at 66% is seen by traders as a potential reversal point where altcoins might begin to regain relative strength. This shift in sentiment is driven by the psychological impact of extended market conditions, where traders tend to accept downtrends as permanent, leading to a loss of confidence in altcoins.

Historical patterns suggest that extreme bearish sentiment often precedes trend changes. The current convergence of a psychological low in altcoins and a technical high in Bitcoin dominance may create the conditions for a market shift. Traders are closely monitoring the 66% level, as it aligns with a broader 8-year trendline that has historically marked the beginning of altcoin recovery phases. While no confirmation has emerged yet, the setup being observed draws parallels to previous altcoin cycle beginnings, indicating a potential cycle shift may be near.

Bitcoin's recent price surge has sparked renewed optimism in the crypto market, with the digital currency up 9% since last Sunday. This upward momentum has led to increased speculation about a potential breakout above its all-time high. Analysts and traders are closely monitoring Bitcoin's next move, as a decisive breakout could significantly impact the broader market, including the altcoin sector. A key on-chain signal suggests that the short-term holder (STH) realized price ratio has dropped below 0.995, indicating that STHs are capitulating and selling at a loss, a behavior often seen at local bottoms. This capitulation typically clears the way for stronger hands to accumulate, setting the stage for a potential recovery and upward trend.

The current market sentiment is bullish, with liquidity returning to risk assets and strong fundamentals supporting Bitcoin's next major move. Bitcoin is currently trading at $107,321, consolidating just below the critical $109,300 resistance level. This zone has acted as a ceiling for over a month, with multiple failed attempts to break above. The latest recovery from the $103,600 support has been strong, with BTC reclaiming all key moving averages—50 SMA ($105,774), 100 SMA ($105,866), and staying well above the 200 SMA ($97,046)—indicating a shift in short-term momentum toward the bulls. The 12-hour chart displays a clear pattern of higher lows, suggesting that buyers are stepping in with increasing confidence. However, the lack of volume during this latest push suggests hesitation, as traders await a confirmed breakout before fully committing.

If bulls fail to break above resistance soon, the $105,000–$103,600 zone becomes the critical area to hold. A breakdown below this range could open the door for a deeper retracement toward the 200 SMA around $97,000. Until then, BTC remains in a neutral-to-bullish posture, with the market watching closely for a decisive move that could shape the next leg of this cycle. The broader market remains optimistic that a confirmed breakout in Bitcoin could shift momentum across the altcoin sector as well. The Altcoin Index is currently at a low 26, highlighting weak liquidity for non-Bitcoin tokens. This explains why Bitcoin continues to dominate above $100K, as altcoins struggle to maintain relevance. Bitcoin's dominance in the crypto market has increased, capturing 64% of the total market value, further emphasizing its strength in the current market environment.