The cryptocurrency market is buzzing with anticipation following a striking analysis from Merlijn The Trader on X. The trader’s chart highlights Bitcoin dominance (BTC.D) nearing the critical 45% threshold, a level historically linked to significant market shifts.
The chart, spanning 2017 to 2025, marks previous instances in 2017 and 2021 where BTC.D hitting 45% preceded major crashes, suggesting a potential repeat in 2025. This signal, paired with a bearish MACD crossover, has sparked debates among investors about the next move.
Technical Indicators Hinting at Market Rotation
Merlijn warns that when BTC.D reaches 45%, the “party ends” for Bitcoin, with capital likely rotating into altcoins. This aligns with recent market trends, including Bitcoin’s volatile swing below $100,000 before rebounding to $103,500 on November 7, driven by whale activity and altcoin gains.
The broader market cap surged $193 billion, with Ethereum and Solana posting notable increases. Enthusiasts see this as a precursor to an “altseason,” where altcoins could see parabolic growth, potentially delivering life-changing returns.
Balancing Optimism and Caution in a Volatile Market
However, skepticism persists. Some argue that thin liquidity and muted whale inflows might delay this cycle, urging caution against blindly following historical patterns. The current setup, with Bitcoin dominance flirting with 45%, could either trigger a massive altcoin pump or signal a broader correction. Investors are advised to watch volume spikes and capital flows closely, as the market teeters on a pivotal moment.
For now, the crypto community is split between optimism and caution. Buying dips could prove lucrative if altcoins ignite, but timing is critical. As liquidity conditions evolve, this 45% level will be a key indicator to watch in the coming days.