Bitcoin Is Slowly Correcting: What’s Next for Dominance and Market Trends?

Bitcoin’s recent price action is showing signs of a slow correction after Bitcoin hit a new local high of $69,487. While the decline may seem worrying to some, corrections of this nature are healthy and necessary for a strong, sustained trend. With Bitcoin still firmly in bullish territory, the focus is on the next move as the market continues to digest this momentum.

Bitcoin’s Slow Pullback: Healthy Consolidation

Bitcoin price is starting to decline, but this correction is in line with expectations. My target remains the previously broken resistance line just above $65,000, which now serves as support. We are also keeping an eye on the TBO Fast Line on the daily time frame as a potential jumping point.

Although I prefer to chart using the daily and weekly time frames, faster time frames such as the 4-hour time frame can provide early reversal signals. Notably, we saw a TBT bear divergence group at $69,000 and two TBO closing long positions, followed by a cross-down signal, suggesting that the bearish consolidation is likely to continue in the short term becomes.

An important observation is the importance of Fibonacci retracements and extension lines. The previous all-time high at $69,000 is acting as strong resistance and the 3.0 Fibonacci extension from 2014 is also respected on the 4-hour chart. These levels are crucial because they often serve as psychological and technical points at which the market pauses or reverses.

The big picture: Patience pays off

Despite the short-term correction, Bitcoin’s long-term prospects remain optimistic. Setbacks like this are healthy and offer opportunities for new beginnings. As I mentioned earlier, we should expect corrections and they should not be feared. In fact, these provisions help strengthen the market for future upside.

The daily RSI has fallen below 70, suggesting that Bitcoin is cooling down after being overbought. This is nothing to worry about as these setbacks give the market a chance to catch its breath before continuing its upward trend. The weekly chart remains strong, with the weekly RSI continuing to rise and the on-balance volume (OBV) trending above its moving average – a good sign of long-term bullish momentum.

Additionally, Bitcoin is still well above the weekly TBO cloud, confirming a strong uptrend on the higher time frames. While there is resistance at $70,167, this is likely to become a target for the next bull market rather than an obstacle to future gains.

What about altcoins?

It is still Bitcoin season at the moment and altcoins are likely to underperform in comparison. OTHERS.D, which tracks altcoin performance, is showing some signs of life but remains under the weekly TBO cloud. This suggests that while there could be short recoveries, altcoins are not yet ready for a sustained breakout.

However, the picture is slowly changing. Starting in mid-December, we could see a more significant shift in altcoin performance as Bitcoin’s dominance wanes. Until then, it would be wise to avoid over-allocation to altcoins and wait for clearer signs of strength.

Total Market Capitalization Charts: The Big Picture

If we look at the TOTAL charts, which track the market capitalization of various segments of the crypto market, we can see mixed signals. Total market cap (TOTAL) is still bullish, with price action above the TBO cloud, but it is facing resistance.

TOTAL2 (everything but Bitcoin) is consolidating bullishly but is still struggling, reflecting the underperformance of the top 10 cryptocurrencies excluding Bitcoin.

TOTAL3 (everything except Bitcoin and Ethereum) is also in a bullish phase, but is currently in transition. This chart reflects the performance of the top 10-30 market cap coins, many of which are looking more bullish but have not yet fully broken out.

Finally, the OTHERS chart, which tracks mid- to small-cap altcoins, shows price action above the daily TBO cloud, indicating an uptrend. However, the on-balance volume shows us that there is not yet strong buying interest. This suggests that low-cap altcoins are still waiting for their moment, which is likely to come once Bitcoin’s dominance wanes.

Stay patient and focus on Bitcoin

While Bitcoin is experiencing a sharp decline, the overall trend remains bullish. Patience is required during these phases because they offer the opportunity to re-enter the market at cheaper prices. The dominance levels show that Bitcoin is still in control and is likely to remain the leading force in the market in the fourth quarter.

Altcoins will have their time, but for now Bitcoin is the focus. As we approach the end of the year, we can begin to take a closer look at altcoins for potential rallies. However, the best strategy for now is to remain patient, keep an eye on key support levels, and prepare for the next increase in the ongoing Bitcoin bull run.