Bitcoin Dominance Reaches Cycle Top, Altcoin Season Looms

Market veteran Raoul Pal, the founder of Real Vision, has revealed that Bitcoin dominance has reached its cycle top, indicating a potential turning point in the cryptocurrency market. Pal's analysis, shared on X, suggests that technical signals, specifically DeMark tops, are pointing to a possible reversal in Bitcoin’s market share, which has been on a steady uptrend since December 2024.

Pal cited DeMark Indicators, developed by industry legend Tom DeMark, as the tools indicating this market top. These indicators are used to identify reversals by pointing out overextended price trends. In this case, Pal noted that daily, weekly, and monthly DeMark tops have aligned for Bitcoin dominance, suggesting that its upward trajectory may be nearing exhaustion. While he did not specify the exact DeMark indicators used, popular ones such as the TD Sequential could have been instrumental in identifying this top.

Despite the recent growth in Bitcoin dominance, the current peak falls short of the 2021 high of 73.63%, which itself was below the 2017 peak. This indicates a long-term weakening trend in Bitcoin’s market grip. Currently, Bitcoin dominance stands at 64.8%, showcasing Bitcoin’s resilience amid a broader market lull. While Bitcoin has gained 6.6% year-to-date in 2025, currently trading at $99,458 as it approaches the $100,000 milestone, the altcoin market has struggled to keep pace.

The TOTAL2 index, which tracks the crypto market excluding Bitcoin, has declined by 19.67% this year, dropping from $1.34 trillion to $1.07 trillion. This disparity has bolstered the steady climb for Bitcoin, which is now looking to mark a sixth consecutive month of gains in May 2025.

Pal’s prediction suggests that the tide may soon turn in favor of altcoins. He introduced the “Banana Zone” to describe what he believes comes next. This term refers to a phase in the crypto market cycle where prices generally explode, creating a parabolic, banana-shaped price curve on charts. Pal divides it into three phases, with the first phase representing the initial breakout for all assets, which occurred in November 2024.

The second phase involves the “Banana Singularity” or altcoin season and involves a period when altcoins experience more uptrend after consolidating, outpacing Bitcoin as investors seek higher returns in riskier assets. This second phase typically follows a peak in Bitcoin dominance, as capital rotates into altcoins.

Other analysts also believe Bitcoin dominance is on track for a correction. For instance, Merlijn the Trader suggested that the altcoin season has observed a trigger, arguing that those who do not position themselves for this shift will become exit liquidity. Additionally, market analyst Crypto Goos noted that Bitcoin dominance might be breaking down soon, identifying a rising wedge structure that has persisted since 2023. Data suggests BTC.D has reached the peak of this wedge, and a breakdown is imminent.