Crypto analyst Merlijn the Trader flagged a renewed “crash signal” in Bitcoin dominance (BTC.D) on X, noting a setup similar to those that preceded major altcoin rallies in 2017 and 2021. His thesis: BTC.D peaks, capital rotates into altcoins and many alts surge, then a large portion of those gains can evaporate during later drawdowns.
Earlier this year BTC.D topped above 65% and has been sliding, now trading just under 60%. Historically, dominance fell from roughly 65% to about 35% after the 2017 high, powering a wave of altcoin gains in 2018. A similar pattern played out in 2021, when dominance moved from near 70% down to around 40%, enabling 10x-plus moves in some tokens before some experienced retracements exceeding 80%.
Because BTC.D measures bitcoin’s market share relative to the rest of the crypto market, traders watch it for signs of broad capital rotation. A sustained drop in dominance often coincides with money flowing into altcoins. Optimists argue that another leg down in BTC.D could inject fresh capital into a sluggish alt market and revive speculative rallies. Skeptics counter that many large altcoins have yet to make new cycle highs — aside from Ethereum and Binance Coin — so any upside could be limited or short-lived.
This cycle looks different from earlier altseasons. In 2017 and 2021, big alts advanced strongly against bitcoin and grew their market share. So far this year, many alts have been trying to catch up to bitcoin’s gains rather than leading a redistribution of market share away from BTC. That divergence raises uncertainty about whether a typical altseason will materialize or whether past patterns will fail to repeat.
Traders say the coming months will be decisive. If bitcoin dominance keeps falling and alts begin sustained outperformance versus BTC, a broad altseason could follow — delivering rapid, substantial short-term gains but also exposing investors to steep corrections. If instead alts continue merely to chase bitcoin without establishing relative strength, the idea of recurring four-year cycles and predictable altseasons may face fresh skepticism.