A widely followed crypto strategist says that one catalyst could trigger an epic collapse in the altcoin markets.
Pseudonymous analyst Altcoin Sherpa tells his 195,700 Twitter followers that he’s keeping an eye on the Bitcoin (BTC) dominance chart (BTC.D).
BTC.D tracks how much of the total crypto market capitalization belongs to the crypto king.
According to the analyst, if BTC.D respects resistance at 48.20%, it could lead to rallies in the altcoin markets as Bitcoin will likely consolidate under such a scenario.
However, Altcoin Sherpa warns that altcoins could get crushed if BTC.D breaks out as a result of Bitcoin plunging toward $25,000.
“BTC.D: If Bitcoin dominance goes down, we see an altcoin run. This would result in BTC continuing to range and be healthy; NOT test the $25,000 levels. If $25,000 comes, alts take a -20-50% bath from here.”
A bearish BTC.D chart suggests that altcoins are gaining value faster than BTC. Meanwhile, a bullish BTC.D chart indicates that the crypto king is rising faster than altcoins or that alts are losing more value than Bitcoin.
Sherpa also predicts that Bitcoin will likely retest the $25,000 level if BTC moves below support at $26,525 on the high timeframe (HTF) chart.
“BTC: let’s see if I actually follow my own advice and chart I analyzed weeks ago. Unless we start to see a strong reclaim here, I am thinking $25,000 is next.”
Altcoin Sherpa adds that several key technical indicators are converging at the $25,000 level for Bitcoin.
“$25,000 has a lot of confluence for Bitcoin.
200-week EMA (exponential moving average)
.382 Fib (Fibonacci retracement level)
Range high and S/R (support/resistance) level
That said, when these things go, it usually goes lower than we expect. Wouldn’t be surprised to see $23,000 or something if this area gets lost.”
At time of writing, Bitcoin is trading for $26,705.
Generated Image: Midjourney
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