Cryptocurrency
Bitcoin Dominance Doji: Why 2021 Could Spell Doom For Altcoins
Bitcoin Dominance Doji: Why 2021 Could Spell Doom For Altcoins: (NewsBTC) Bitcoin has been explosive all of 2020, and while certain altcoins like Ethereum and a slew of DeFi tokens have outperformed the top cryptocurrency this year, altcoins overall have been a disappointment compared to past cycles. Those who lived through past cycles, expected altcoins to […]
Bitcoin Dominance Doji: Why 2021 Could Spell Doom For Altcoins:
(NewsBTC) Bitcoin has been explosive all of 2020, and while certain altcoins like Ethereum and a slew of DeFi tokens have outperformed the top cryptocurrency this year, altcoins overall have been a disappointment compared to past cycles.
Those who lived through past cycles, expected altcoins to take off the moment Bitcoin surpassed its previous peak. But that moment has come and gone, and while there have been some glimmers of positive momentum, the asset class as a whole is lagging behind BTC. This is reflected in BTC dominance, which could close 2020 with a dangerous-looking doji candle, signaling “indecision” and potential doom for altcoins in 2021.
Crypto Market Indecision: Bitcoin Dominance To Close 2020 With A Doji Candle
From the cryptocurrency bear market bottom to current prices, altcoins have been left in Bitcoin’s dust. The leading cryptocurrency by market cap has led the bullish charge, and already is trading almost $10,000 above its former all-time high.
But altcoins are nowhere in sight, and not even in the rearview of Bitcoin at this point. The divergence in capital flowing between the two types of crypto assets has caused BTC dominance – a metric measuring the top crypto asset against other altcoins by market cap – to soar to 70%.
70% dominance is roughly where dominance started the year, despite the rollercoaster ride of a year that was 2020. Because the distance between the yearly open and close could be so narrow, there’s a risk of the annual candle closing as a doji.
A red doji could be left behind on the 2020 BTC dominance chart | Source: CRYPTOCAP-BTC.D on TradingView.com
Doji are dangerous because they signal indecision and make choosing a direction less clear. They form at the top of trends when they are reversing or just before continuation when a market takes a breather.
The six-month candle pictured below shows that 70% dominance has acted as a strong resistance level in the past, and why it is currently presenting such a challenge to break. It could also act as a point where dominance turns around, Bitcoin bleeds or stagnates, and altcoins rocket off into the sunset.