If we look closely at Bitcoin dominance, it has been sliding from 66% to around 59%, forming a textbook falling wedge. Normally, this is a bullish reversal pattern — and when it plays out, history shows it hurts altcoins the most.
Right now, there’s also a clear bullish divergence on RSI: while the dominance has been falling, momentum is actually climbing. This divergence often signals that a reversal is coming, and when Bitcoin dominance rises, it doesn’t hurt BTC much, but it usually triggers heavy selling pressure in altcoins.
At the same time, USDT dominance is showing signs of heading higher. When these two align — Bitcoin dominance moving up and USDT dominance ticking higher — it sets up a tough environment for alts. Money rotates into Bitcoin, stability is prioritized, and altcoins become the exit liquidity.
In short, the setup is hinting that Bitcoin dominance is preparing to move higher, which could trigger a rotation out of altcoins and potentially cause a sharp correction in the altcoin market. Traders should be cautious — what looks calm in the charts today may flip quickly once dominance breaks out of this structure.
