Dominance Charts Suggest Stress Building in Crypto Market

The crypto market's dominance charts are sending mixed signals, with some indicators pointing towards stress building underneath the calm surface. The recent rejection of USDT Dominance near a four-year resistance level has sparked debate about the start of 'altseason 3.0'. But what does this mean for investors?

USDT Dominance reached 9%, meeting the same resistance that marked cycle turning points in June and November 2022. The weekly chart printed a sharp upper wick, confirming rejection rather than continuation. Historically, such readings at multi-year resistance have not sustained.

BTC Dominance also broke a rising wedge on the weekly chart, with price closing near 58.99% after forming a topping structure. Momentum indicators softened, with MACD lines curling down and RSI cooling. However, if BTC Dominance quickly reclaims its wedge support, it could weaken the bearish read.

The current sentiment in the market is fragile, with extreme fear levels matching those seen during the COVID crash and FTX collapse. This emotional capitulation has often been a sign of weakness before a meaningful shift unfolds. If both USDT and BTC Dominance continue to slip from resistance, liquidity may rotate into higher beta names, potentially triggering an altcoin rotation.