A widely followed crypto strategist says one catalyst could trigger an epic collapse in the altcoin markets.
Pseudonymous analyst Altcoin Sherpa tells his 195,700 Twitter followers that he is keeping an eye on the Bitcoin (BTC) dominance chart (BTC.D).
BTC.D tracks how much of the total crypto market capitalization belongs to the crypto king.
According to the analyst, if BTC.D respects the 48.20% resistance, it could lead to rallies in the altcoin markets as Bitcoin is likely to consolidate in such a scenario.
However, Altcoin Sherpa warns that altcoins could be crushed if BTC.D breaks out due to Bitcoin falling to $25,000.
“BTC.D: As Bitcoin dominance wanes, we see an altcoin run. This would lead to BTC continuing to range and stay healthy; DO NOT test the $25,000 levels. If $25,000 comes in, alts will take a -20-50% bath from here.
A bearish BTC.D chart suggests that altcoins are rising in value faster than BTC. Meanwhile, a bullish BTC.D chart indicates that the crypto king is rising faster than altcoins or that alts are losing more value than Bitcoin.
Sherpa too predicts that Bitcoin will likely retest the $25,000 level if BTC breaks below the $26,525 support on the high time frame (HTF) chart.
“BTC: Let’s see if I follow my own advice and chart that I analyzed weeks ago. Unless we start to see a strong pullback here, I think $25,000 is next.
Altcoin Sherpa adds that several key technical indicators are converging at the USD 25,000 level for Bitcoin.
“$25,000 has a lot of influence on Bitcoin.
200 week EMA (exponential moving average)
200 days EMA
.382 Fib (Fibonacci Retracement Level)
Reach high and S/N level (support/resistance).
That said, when these things go, it usually goes lower than we expect. Wouldn’t be surprised to see $23,000 or something if this area goes to waste.
At the time of writing, Bitcoin is trading at $26,705.
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