Bitcoin recently tested the $108,800 level but failed to sustain momentum above it, once again highlighting strong resistance just below its all-time high. The rejection has left traders cautious, with many anticipating increased volatility in the near term. As BTC continues to trade below the critical $109,300–$110,000 resistance zone, market participants are closely watching for signs of either a decisive breakout or a potential pullback.
Amid this consolidation phase, a notable technical development has emerged. Veteran crypto analyst Ted Pillows has pointed to a daily bearish divergence in the Bitcoin dominance chart—an indicator that historically precedes shifts in market momentum. This divergence occurs when Bitcoin’s dominance rises on price charts while underlying momentum indicators begin to weaken, suggesting that BTC’s relative strength may be peaking.
👉 Discover how market cycles shift from Bitcoin to altcoins and what to watch for next.
This pattern is particularly significant because it often signals the beginning of an altseason—a period when capital rotates out of Bitcoin and into higher-growth altcoins. While Bitcoin remains range-bound, investor focus could soon pivot toward undervalued ecosystems offering stronger upside potential.
Market Conditions Set the Stage for Altcoin Rotation
The broader crypto market has stabilized following a recent easing of geopolitical tensions involving the U.S., Israel, and Iran. This de-escalation helped restore confidence in risk assets, pushing Bitcoin above $105,000 and reclaiming key technical support levels. The move reflected renewed optimism and suggested that macro conditions may be improving.
Despite this positive momentum, Bitcoin has struggled to break past $110,000. Price action has become increasingly choppy, lacking the strong conviction needed for a sustained rally. This hesitation raises concerns about weakening bullish momentum. Historically, prolonged consolidation near resistance—especially after multiple failed breakout attempts—increases the likelihood of capital rotating into alternative sectors of the market.
Ted Pillows’ analysis highlights that Bitcoin dominance, while still trending upward, is showing classic signs of exhaustion. A rising dominance typically indicates that BTC is absorbing most of the market’s capital inflows. However, when this rise coincides with declining momentum on oscillators like the RSI or MACD, it forms a bearish divergence—a warning sign that the trend may be losing steam.
When such divergences occur, they often precede sharp corrections in Bitcoin and explosive rallies in altcoins. As investor sentiment shifts, capital begins flowing into assets with higher beta and greater speculative potential. This dynamic could set the foundation for the next major altcoin surge.
ETH/BTC Ratio Hints at Imminent Reversal
One of the most telling indicators of an approaching altseason is the ETH/BTC exchange rate. Since late 2022, Ethereum has underperformed significantly against Bitcoin, with the ETH/BTC pair dropping from over 0.085 BTC to around 0.0228 BTC—a multi-year low not seen since 2020. This prolonged downtrend confirmed Bitcoin’s role as the dominant asset during the last phase of the bull cycle.
However, recent price action suggests a potential turning point. The ETH/BTC ratio appears to have found support near the 0.02 BTC level after a steep decline. Although it remains below key moving averages (50-, 100-, and 200-week), selling pressure has noticeably diminished. Trading volume has also begun to stabilize, indicating that capitulation may be ending.
👉 Learn how to spot early reversal signals in major crypto pairs before the crowd catches on.
If Ethereum can hold this support and begin forming higher lows, it could signal the start of a new uptrend in the ETH/BTC ratio. Such a shift would imply that Ethereum—and by extension, other altcoins—are regaining favor among investors. Combined with weakening Bitcoin dominance momentum, this could accelerate capital rotation into the broader altcoin market.
What This Means for Investors
The convergence of technical signals—bearish divergence in Bitcoin dominance, stabilization in ETH/BTC, and geopolitical risk reduction—creates a compelling case for an upcoming altseason. While Bitcoin remains essential as a market leader and store of value, periods like this often reward those who strategically allocate capital into high-potential altcoins before broader market recognition.
Historically, altseasons have delivered outsized returns for early movers. Projects with strong fundamentals, active development, and growing adoption tend to outperform during these phases. Sectors such as decentralized finance (DeFi), layer-1 blockchains, and real-world asset tokenization are often among the first to benefit.
That said, timing remains critical. Jumping in too early can expose investors to volatility; waiting too long means missing peak growth phases. Monitoring both on-chain data and market structure can help identify confirmation signals—such as rising altcoin volume, increasing exchange inflows into alts, and sustained outperformance relative to BTC.
Frequently Asked Questions (FAQ)
Q: What is Bitcoin dominance bearish divergence?
A: It occurs when Bitcoin’s market share (dominance) rises but momentum indicators like RSI or MACD decline. This mismatch suggests weakening strength and often precedes a shift in capital toward altcoins.
Q: How reliable is this signal for predicting altseason?
A: While not guaranteed, bearish divergences in Bitcoin dominance have historically preceded major altcoin rallies. They are most effective when confirmed by other indicators like volume trends and cross-asset performance.
Q: What does ETH/BTC recovery indicate?
A: A rising ETH/BTC ratio means Ethereum is gaining value relative to Bitcoin—an early sign that investor sentiment is shifting toward altcoins and could signal the start of altseason.
Q: Should I sell Bitcoin to buy altcoins?
A: Not necessarily. Strategic diversification—reallocating a portion of holdings—can capture altcoin upside while maintaining BTC exposure. Always assess risk tolerance and do thorough research.
Q: Which altcoins typically perform best during altseason?
A: High-beta assets with strong use cases often lead—such as Ethereum, Solana, Avalanche, and emerging DeFi or AI-integrated tokens. Established projects with active ecosystems tend to outperform speculative ones.
Q: How long do altseasons usually last?
A: They vary but can last several months depending on macro conditions, innovation cycles, and overall market sentiment. Some extend through multiple waves of sector-specific rallies.
Core keywords naturally integrated: Bitcoin dominance, bearish divergence, altseason, altcoins, ETH/BTC, market rotation, technical analysis, crypto cycle.
👉 Stay ahead of the next market rotation with real-time data and advanced trading tools.
With Bitcoin consolidating near resistance and technical indicators flashing cautionary yet opportunistic signals, the stage may be set for a significant shift in market leadership. Whether you're a long-term hodler or an active trader, understanding these dynamics can help you navigate the evolving crypto landscape with greater confidence and precision.