Bitcoin Dominance Shows Bearish Monthly MACD Cross, May Precede Rotation Into Altcoins

• Monthly MACD shows a bearish cross on Bitcoin dominance

• Bearish engulfing candles at resistance mirror the 2021 setup.

• Historical data: Ethereum gained 600%+ during the last dominance decline.

Bitcoin dominance falls as monthly MACD turns bearish—watch altseason rotation and trading opportunities. Read now for technical signals and key takeaways.

What is driving the decline in Bitcoin dominance?

Bitcoin dominance is declining due to a rejection at a long-term descending resistance and a bearish cross on the monthly MACD. These signals indicate momentum is shifting away from Bitcoin and toward altcoins, increasing the chance of a broad market rotation and potential altseason.

How does the monthly MACD confirm bearish momentum?

The monthly MACD recently produced a downward cross and a red histogram, mirroring the 2021 signal that preceded a major dominance decline. When MACD lines cross down on a monthly timeframe, it signals a sustained momentum shift, which historically led to capital flowing out of Bitcoin and into altcoins.

Bitcoin dominance breaks trend as monthly MACD turns bearish. Altcoins prepare for rotation, echoing past cycles with Ethereum’s 600% surge.

• Bitcoin dominance rejected at resistance with bearish engulfing candles, repeating a pattern seen in the 2021 cycle.
• Monthly MACD shows a bearish cross, signaling momentum shift away from Bitcoin toward altcoins.
• Ethereum gained over 600% during the last dominance decline, sparking one of the strongest altseasons in history.

Bitcoin dominance has weakened after another rejection at a long-term resistance level, signaling a potential shift in market structure. A bearish cross on the monthly MACD suggests capital rotation toward altcoins could be underway, similar to the 2021 cycle.

Bitcoin Dominance Faces Rejection

Bitcoin dominance has continued to move lower after facing a strong rejection at the descending resistance line. The chart highlighted by analyst Merlijn The Trader shows two bearish engulfing candles—one in 2021 and another in 2024/25. Each rejection occurred at a crucial resistance zone, indicating sellers remain in control.

Source: MerlijnTrader

These monthly bearish engulfing candles reflect structural weakness in Bitcoin dominance. They signal periods when selling pressure outpaced attempts to increase dominance. Repetition of this pattern increases the probability that history could repeat, prompting traders to watch for rotation.

The rejection aligns with broader signs of capital moving into alternative assets. As Bitcoin’s market share retreats, liquidity historically shifts to altcoins, often triggering rapid growth in mid- and small-cap tokens.

MACD Confirms Bearish Momentum

The monthly MACD indicator strengthens the bearish case. The 2021 bearish cross preceded a sharp dominance decline and a broad altcoin rally. The present MACD mirrors that setup: a downward cross and a red histogram, which traders interpret as a decisive momentum change away from Bitcoin.

When MACD lines cross downward, momentum shifts typically favor higher-risk assets. Historical outcomes show investors often rotate into altcoins seeking outsized returns when Bitcoin dominance falls.

Merlijn noted that the last similar setup coincided with Ethereum surging more than 600% as dominance declined, underscoring the potential magnitude of rotation if conditions persist.

Market Rotation and Altseason Potential

As of writing, Bitcoin is priced at $113,836, down 1.36% in 24 hours and 4.71% over the past week. Ethereum is priced at $4,231.03, -0.93% daily and -8.55% weekly. These moves coincide with weakening dominance and renewed discussion about altseason.

The dominance rejection is both technical and structural. Traders are increasingly allocating capital to altcoins as Bitcoin’s share shrinks. Liquidity rotation can result in rapid price acceleration across smaller caps. Merlijn’s comment, “Altseason just declared war,” captures how abrupt and forceful past rotations have been.

Frequently Asked Questions

Will a bearish monthly MACD always cause an altseason?

Not always, but a bearish monthly MACD on dominance historically precedes altcoin strength. Confirmation requires supportive price action, liquidity conditions, and market sentiment aligning with rotation into altcoins.

How should traders prepare for a potential altseason?

Traders should set clear risk limits, perform token-specific due diligence, size positions conservatively, and use stop-loss orders. Prioritize liquidity and project fundamentals when reallocating from Bitcoin to altcoins.

Key Takeaways

• Technical signal: Monthly MACD bearish cross indicates momentum shift.
• Pattern repeat: Bearish engulfing candles at resistance mirror 2021 behavior.
• Actionable insight: Monitor dominance, liquidity flows, and altcoin fundamentals for rotation opportunities.

Conclusion

The decline in Bitcoin dominance and a bearish monthly MACD point to a likely capital rotation toward altcoins, increasing the probability of a significant altseason. Traders should combine technical confirmation with risk management while monitoring liquidity flows and project fundamentals. For continued coverage and trade analysis, follow COINOTAG updates.