Key Takeaways
Bitcoin dominance slipped throughout its 20% rally to $123k, marking a uncommon divergence that alerts capital rotation into alts, not exhaustion.
Bitcoin dominance [BTC.D] has now printed 4 consecutive purple weekly candles, with the newest (14–20 July) closing at a 5.81% loss, marking the longest purple streak in over three years.
Notably, this downtrend occurred whereas BTC rallied almost 20% and hit a brand new all-time excessive at $123k. Usually, BTC.D rises with worth, however this time, it slipped.
Which means because the mid-June backside, capital has steadily shifted down the chance curve, flowing out of BTC and into altcoins. Ethereum dominance [ETH.D] alone is up almost 30% in the identical window, confirming this shift.
Supply: TradingView (BTC.D)
This sort of divergence issues. It marks a transition from a Bitcoin-led run to broader market power.
Look again on the Might ATH: BTC hit $111k, and dominance surged in tandem, peaking close to 66%. That was a textbook risk-off rally. Capital crowded into BTC because the cleanest high-conviction commerce.
Quick-forward to now, and we’re seeing a mirrored construction play out.
Halfway by way of the week, BTC.D is bouncing off the 60% zone. In the meantime, ETH.D has pulled again 2.63%. It’s an indication merchants is perhaps de-risking alt publicity. So, are we front-running one other dominant BTC leg right here?
Bitcoin rally appears to be like wholesome, not euphoric
If previous cycles are something to go by, BTC.D sometimes wants no less than 4 consecutive inexperienced weeklies (a full rotation window) to lock in a real Bitcoin-led regime.
That sign by no means confirmed over the past ATH, which possible capped the upside and lower the rally quick.
That’s the place on-chain provides some sign. Regardless of the rally, Bitcoin’s MVRV Z-Rating solely peaked at 2.89. Elevated, certain, however nonetheless nicely under the hazard zone (3.0-4.0) the place blow-off tops normally kind.
Supply: Glassnode
Translation: Bitcoin moved quick, however we didn’t get the type of overheated sentiment that sometimes marks a cycle prime.
Subsequently, if BTC.D begins printing greater highs and alt flows keep muted, this might form up because the early innings of a renewed Bitcoin-led leg, not a cycle peak.