- A bearish divergence has appeared on the BTC dominance chart
- If SOL turns bullish, then it could target $187 in the coming weeks
Bitcoin (BTC) Bitcoin dominance has been rising for several weeks, suggesting that altcoins may have to wait longer for a rally. However, the situation could soon change as a bullish divergence appears to be emerging on the charts. This could allow altcoins like Solana (SOL) to gain bullish momentum soon.
So it’s worth looking at the chances of an altcoin summer.
Will Bitcoin Dominance Fall Soon?
BTC dominance has consistently remained well above the 50% mark. Whenever this metric increases, it indicates that the chances of altcoins gaining momentum are low. At press time, BTC dominance stoOrd at 54%, according to Coin Statistics.
Additionally, AMBCrypto’s assessment of the Altcoin Season Index revealed that the indicator had a value of 20. Typically, a value below 25 suggests a Bitcoin season.
Source: Blockchain Center
However, the situation may soon change. CryptoBullet, a popular crypto analyst, recently shared a tweet highlighting a bullish and bearish divergence on the BTC dominance chart. Similarly, as BTC dominance increased, a bearish divergence appeared on the Relative Strength Index (RSI) chart.
This could indicate a possible decline in cryptocurrency dominance in the future.
Interestingly, the opposite happened in late 2021, leading to a surge in BTC dominance in the following months. If the bearish divergence pattern is tested, investors could soon see altcoins thriving across the board.
Source: X
Will Solana benefit?
Given that a decline in BTC dominance could lead to a rally in altcoins, AMBCrypto planned to check the status of Solana to see if it was showing signs of a bullish rally. CoinMarketCapThe value of SOL has fallen by more than 10% in the last seven days.
At press time, the stock was trading at $138.57 with a market cap of over $64 billion.
The bad news is that SOL’s trading volume skyrocketed while its price plummeted, legitimizing the downtrend. The token’s weighted sentiment also dropped sharply, meaning bearish sentiment around SOL was dominant.
Source: Santiment
Nevertheless, SOL’s open interest has declined. Usually, a decline in this metric indicates that there are chances of the current price trend changing. Therefore, AMBCrypto checked SOL’s daily chart to see what the technical indicators were suggesting.
The Money Flow Index (MFI) has registered a decline, suggesting a sustained decline in prices. If this happens, investors could then see SOL fall to $127.
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On the contrary, Chaikin Money Flow (CMF) has been surging. Moreover, if BTC dominance falls, SOL could just as easily turn bullish. In case of a bullish takeover, SOL could target $163 before starting its journey towards $187.
Source: TradingView
