On Friday, March 28, Bitcoin started showing multiple signs of a potential correction, both in its price and dominance. This long-term trendline suggests that Bitcoin dominance is about to see a major correction.
Bitcoin’s dominance has steadily increased in the past few years, only falling when the markets overheat. This year, the cooling crypto markets have contributed to traders rejecting altcoins and opting for a safer bet. However, there are growing signs of a correction, which may see altcoins explode.
On Friday, March 28, Bitcoin started showing multiple signs of a potential correction, both in its price and dominance. Firstly, Bitcoin’s dominance is currently at 62.03% and is running against a long-term trendline charted from its multi-year highs. This creates a wedge formation with the recent low in December.
This long-term trendline suggests that Bitcoin dominance is about to see a major correction. This potentially means a fall to 40%, a level last seen in 2023. This scenario could play out in several good and bad ways for BTC.
A drop in Bitcoin’s dominance can occur during both rising and falling crypto markets. For instance, in 2023, when dominance was just 40%, the total crypto market cap was $1 trillion compared to its current level of $2.77 trillion.
On the other hand, BTC is currently trading at $85,107, below the 200-day Exponential Moving Average of $85,555. This key indicator suggests that troubling times may be ahead, although Bitcoin tended to recover above these levels after some months.
Another chart adds to a bearish case, with the BTC price rejecting the resistance at $88,400, which formed in December. This suggests that a near-term correction is coming, which could see Bitcoin’s price tumbling. However, this scenario would likely hurt altcoins even more since they are typically more volatile.
A longer-term chart offers a more positive spin on these scenarios. Bitcoin is currently forming a narrowing wedge, whose upper boundary is around $110,000. The Bitcoin price will likely crash if it falls below its lower boundary. Despite this, the long-term outlook remains positive and could benefit altcoins.
Overall, the charts suggest that the BTC price is at a key point, indicating that it can either break out of its resistance or crash. However, a breakout is more likely to coincide with a fall in dominance, as, in this scenario, altcoins will likely rise even further.
