Bitcoin price is diving currently, shaking up the crypto market as a whole. In addition to the correction in the top cryptocurrency by market cap, altcoins have taken an even more severe beating.
With top alts like Ethereum and Litecoin are seeing an even further drop on BTC trading pairs, Bitcoin dominance has formed a bullish engulfing candle just as a key technical indicator reach overheated status. Here’s how that could put an abrupt end to the ongoing Altcoin
‘ href=”https://www.newsbtc.com/dictionary/altcoin/”>altcoin. Ethereum is currently the king of that camp, and is outpacing Bitcoin in performance since its inception.
But due to first move advantage and just how dominant Bitcoin is, it represents more than 50% of the entire crypto market cap. The BTC dominance metric was created to measure the rest of the crypto market and its weight compared to all altcoins.
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BTC dominance has dropped by 18% since end of 2020 highs, leaving a red streak behind. However, during today’s crypto market bloodbath, the metric began to make a comeback and has formed a bullish engulfing candle.
A bullish engulfing candle is a type of Japanese candlestick formation, that typically suggests a short term reversal is in the coming. It forms when after a sharp bearish move, sellers are overwhelmed by a sudden surge in bullish buying. It is then up to bulls to continue the reversal.
A bullish engulfing appears as daily RSI reached oversold conditions | Source: CRYPTOCAP-BTC.D on TradingView.com
BTC Dominance Reversal Could Put An End To Alt Season
Coinciding with the bullish engulfing candle pictured above, the daily Relative Strength Index fell sharply into oversold territory. If a reversal plays out in BTC dominance, whatever