Over the weekend, altcoins began to pull out after a massive market-wide rally, starting with Ethereum. And while the market appeared to be turning bearish, news of that a huge Bitcoin purchase made by car maker Tesla set the crypto market on fire.
With Bitcoin pairs, altcoins started to bleed across the board. But according to some technical indicator and BTC dominance, the price action could be nothing more than a momentary shakeout before the full alt season kicks off.
Tesla buys Bitcoin, Crypto Fever boils over
As if the magma-hot crypto market needs some other reason coins to be trendinga SEC filing revealed that Tesla had purchased $ 1.5 billion worth of BTC.
The sale itself had been made some time before, but the news of it triggered a wave of FOMO and prices started to rise. Exchanges such as Binance went down due to the huge demand from investors looking to buy Bitcoin.
Related reading | Altcoin season is here: “Buy Crypto” trumps Bitcoin searches on Google
Not only are they looking for more BTC in hopes of reaping further advantage, but given the support of the likes of Elon Musk, crypto investors have even ditched altcoins in exchange for more Bitcoin.
But according to the Ichimoku Kinko Hyo technical indicator and BTC dominance can be deceptive outwardly.
News leaves Altcoins battered, but BTC dominance suggests it’s a shakeout
BTC dominance is a measure that weighs Bitcoin’s massive market share against the rest of the room. The top cryptocurrency has long enjoyed two-thirds or more dominance, but is at risk of losing it for good.
After another attempt to set new highs in dominance, BTC plummeted and dropped below 63% as Ethereum broke its old record and other alts skyrocketed.
BTC.D is being rejected by the Ichimoku cloud on weekly timeframes | Source: CRYPTOCAP-BTC.D on TradingView.com
And while it looks like dominance is poised to reverse again, the Ichimoku suggests that a bearish retest is underway. In the chart above, the green candle tries to break back into the cloud on weekly time frames. Three failed weeks have left fuses in the cloud, but further upward in dominance has not materialized.
Related reading | Altcoin Market Cap on the brink of a life-changing outbreak
On higher monthly installments, the story being told is similar. A huge green candle was completely overrun by bears meaning altcoins have finally turned the corner against Bitcoin.
Even more bearish signals exist on monthly timeframes | Source: CRYPTOCAP-BTC.D on TradingView.com
Price action on monthly BTC.D charts shows that a red candle is barely hanging on the baseline on the Ichimoku either. A closure underneath, suggests a further drawback.
A drop deep below 63% is likely if the support turned that resistance continues to reject BTC.D. Could the best alt season ever be just days away? Adding more credibility to the theory, recently, Google searches because “buy crypto” first began to surpass “buy bitcoin”.
Featured image from Deposit Photos, Charts from TradingView.com