This chart is pretty simple. I'm not going to go really deep here in terms of why I think this may play out. I'm just noticing a potential pattern and drawing a speculative chart to show what COULD happen if Bitcoin dominance is in a long term downtrend. In the 2016-2017 bull market, dominance only started declining once Bitcoin passed its all-time-high, but it may not happen that way this time around.
Chart features:
RED - Potential Downtrend lines for dominance that can be traced back to the period between 2014 and 2017.
PINK - Reflective wedges showing downside acceleration followed by correction to the upside. Downside occurs in a broadening wedge formation, while upwards correction occurs in the form of a rising wedge.
ORANGE - Pathway that would include a new low for Bitcoin dominance, potentially around 30%. We are very close to the wedge support at this point. If it doesn't hold, I expect an acceleration to the downside for dominance.
Bearish Possibility for Alts and Crypto
We have a couple of bearish possibilities:
1) Dominance increases because Bitcoin wants to test ATH first. It can head up towards 79%-80%. If it heads to 90%, I don't think that would be good for the crypto sphere as a whole.
2) Dominance increases because Bitcoin cannot hold current levels, and the entire market falls apart.
3) Dominance increases back to 95%+, erasing the entire altcoin market. Bitcoin wins out as the only cryptocurrency used globally aside from national-backed cryptos.
I think #1 is the most likely, if dominance is to increase. But...dominance is in a long term downtrend. Unless it gets back to 90% and above, I won't be worried. This cycle is quite painful for altcoin holders, but I do expect projects with widespread use will at least try to compete with Bitcoin over the next 5 years.
That's it! This is not financial advice. This is entirely speculative, and should be treated as such.
-Victor Cobra