Bitcoin dominance crosses 64% in 4 years: 2021-style altcoin season to return?

• Altcoins are gearing up for a possible breakout, as Bitcoin’s dominance shows signs of overextension.
• The setup closely resembles the 2021 cycle — Is history about to repeat itself?

Bitcoin Dominance [BTC.D] has breached a key structural threshold, surpassing the 64% level for the first time in over four years. 

This upside expansion, while technically bullish, is now accompanied by a Relative Strength Index (RSI) print deep in overbought territory.

Hence, suggesting potential exhaustion in Bitcoin’s [BTC] relative outperformance.

Source: TradingView (BTC.D)

Structurally, the current setup mirrors the 2021 cycle, wherein BTC.D marked a local top as the Altcoin Market Index bottomed below 10 level, only to be followed by a sweeping rotation into altcoins.

By Q1 2022, the altcoin index surged past 75, signaling a definitive shift in market leadership and confirming the onset of a full-fledged alt season. 

Given this backdrop, the present dynamics may be forming the prelude to a similar rotation. 

Bitcoin’s strength tested at the top

Over the past week, the total market cap excluding Bitcoin saw a significant $42 billion increase.

This indicates that as Bitcoin dominance reached a local peak, altcoins experienced substantial capital inflows.

Among large-cap altcoins, Solana [SOL] stands out, registering a double-digit percentage increase on its weekly chart.

Additionally, the altcoin market index saw a sharp rebound, rising from 13 to 20.

This price action mirrors the 2024 cycle structure, where the index fell to a similar low in Q3 before rallying back to 87 by early December.

Source: BlockChainCenter.Net

In conclusion, both technical analysis and historical price action support the likelihood of a 2021-style market cycle unfolding.

If Bitcoin’s price is testing a local top while its dominance shows signs of exhaustion, Solana’s 11% surge could be an early signal of capital rotating into altcoins.

As a result, an all-out altcoin season may materialize, with a target timeframe of late Q3 to early Q4.

Altcoins set to exploit BTC’s fatigue?

AMBCrypto’s BTC.D analysis underscores a key inflection point in market structure. 

On the 7th of April, BTC.D closed at 64%, breaching a multi-year resistance and marking its highest dominance level since early 2021. 

Concurrently, the RSI printed above 80, signaling an overbought regime and potential exhaustion in Bitcoin’s relative outperformance.

This technical divergence was validated on the 8th of April. Bitcoin registered a 3.65% drawdown, confirming mean reversion from overheated conditions.

Source: TradingView (BTS/USDT)

According to AMBCrypto, the confluence of BTC.D’s parabolic extension into a multi-year resistance band and Bitcoin’s rejection at the $86k macro supply zone presented an optimal window for capital rotation into altcoins.

However, despite this setup, strategic investors did not act decisively. 

Following three consecutive sessions of drawdown in BTC.D, the metric subsequently retraced, breaking back above 64% over the next seven days. 

Hence, solidifying Bitcoin’s prevailing dominance. 

This shift in behavior signals a key takeaway: A sustained high BTC.D no longer acts as a reliable precursor for capital rotation.

Thus, despite the technical signals, historical trends, and capital inflows, the likelihood of an altcoin season has completely waned.