Emily Walker
Bitcoin (BTC) dropped from $108,135 on December 17 to $99,500 after remarks from US Federal Reserve (Fed) Chair Jerome Powell hinted at continued hawkish policies. Nevertheless, some crypto analysts are optimistic that a decrease in Bitcoin Dominance (BTC.D) could signal the start of an altseason.
Reasons Behind the Crypto Market Decline
In the last 24 hours, the total valuation of the cryptocurrency market has decreased by over 6%, predominantly affecting altcoins. In total, this amounts to a loss exceeding $200 billion.
Powell’s comments about the Fed’s ongoing struggle with inflation prompted this market downturn. He suggested that only two interest rate cuts are expected in 2025, rather than the previously anticipated three.
Moreover, the Fed raised its inflation forecast for 2025 from 2.1% to 2.5%, with the 2026 estimate also set at 2.1%, surpassing the target of 2%. This indicates that inflation concerns might linger for at least another two years, likely keeping interest rates elevated for longer than expected.
The negative reaction in the crypto market led to liquidations exceeding $850 million within a day. However, some analysts view this downturn as a chance to purchase altcoins, anticipating a future decline in BTC.D.
Is Bitcoin Dominance on the Verge of a Drop?
Recent weekly charts show Bitcoin Dominance has been rising steadily over the past two weeks, climbing from 56.24% to 58.50%. Analysts believe that BTC.D may be forming a lower high, which could be followed by a significant drop and the onset of an altseason.
On X, analyst Eric Crown shared insights regarding the BTC.D chart, suggesting it could decrease to 54% after a minor climb to 59%.
Another analyst, @CryptoGoos, indicated that BTC.D has likely reached its peak. This trader predicted an altcoin season following a rejection of BTC.D from resistance levels between 58% and 59%.
Bitcoin and stock analyst Seth also commented on BTC.D’s past performance in previous market cycles. He noted that BTC.D might consolidate at around 58% before experiencing a sharp drop.
In addition, former BitMEX CEO Arthur Hayes expressed his view on the market, foreseeing a significant downturn around the inauguration of US President-elect Donald Trump on January 20, 2025. Currently, Bitcoin is priced at $100,978, reflecting a 3% decrease in the past day.
