Bitcoin Dominance To Soar Again?

Market Analysis & Bitcoin Dominance - Bitcoin dominance has been increasing, defying expectations that it would decrease immediately after the end of quantitative tightening (QT) [3] - The current market situation shares similarities with 2019, where Bitcoin topped before the Federal Reserve's balance sheet expansion [1] - Bitcoin's top formation occurred on apathy rather than euphoria, unlike the tops in 2017 and 2021, indicating a lack of new retail investor interest [3][4] - Historically, Bitcoin dominance tends to reverse course in September, regardless of its prior direction [8] - Total 2 minus USDT divided by Bitcoin has been dropping, suggesting a predictable pattern [11] Quantitative Tightening (QT) & Federal Reserve Policy - The end of QT on August 1st, 2019, did not immediately lead to a decrease in Bitcoin dominance; it initially rose before declining when the Fed's balance sheet expanded [2][3] - The balance sheet may not expand immediately after QT ends, potentially delaying recognition until January 2026 [13] - Interest rates remain high (4%), unlike the previous cycle when Bitcoin dominance topped out with rates at 2% [30] - The difference between interest rates and the 2-year yield is a key indicator; a smaller difference or a Fed funds rate below the 2-year yield is more conducive to altcoin market performance [33] Altcoin Market & Future Outlook - Altcoins may experience another drop against Bitcoin before potentially finding a low when the Fed's balance sheet starts to expand [27] - Alt seasons typically require social risk appetite and new retail investors, which are currently lacking [23][35] - Altcoins often form a low in the summer followed by a double bottom in Q4, or vice versa [25][26][27] - Ethereum could potentially reach a new all-time high even if Bitcoin does not, but it would likely be a divergent high [24]