Key Takeaways
Bitcoin dominance slipped during its 20% rally to $123k, marking a rare divergence that signals capital rotation into alts, not exhaustion.
Bitcoin dominance [BTC.D] has now printed four consecutive red weekly candles, with the most recent (14–20 July) closing at a 5.81% loss, marking the longest red streak in over three years.
Notably, this downtrend happened while BTC rallied nearly 20% and hit a new all-time high at $123k. Normally, BTC.D rises with price, but this time, it slipped.
That means since the mid-June bottom, capital has steadily shifted down the risk curve, flowing out of BTC and into altcoins. Ethereum dominance [ETH.D] alone is up nearly 30% in the same window, confirming this shift.
Source: TradingView (BTC.D)
This kind of divergence matters. It marks a transition from a Bitcoin-led run to broader market strength.
Look back at the May ATH: BTC hit $111k, and dominance surged in tandem, peaking near 66%. That was a textbook risk-off rally. Capital crowded into BTC as the cleanest high-conviction trade.
Fast-forward to now, and we’re seeing a mirrored structure play out.
Midway through the week, BTC.D is bouncing off the 60% zone. Meanwhile, ETH.D has pulled back 2.63%. It’s a sign traders might be de-risking alt exposure. So, are we front-running another dominant BTC leg here?
Bitcoin rally looks healthy, not euphoric
If past cycles are anything to go by, BTC.D typically needs at least four consecutive green weeklies (a full rotation window) to lock in a true Bitcoin-led regime.
That signal never confirmed during the last ATH, which likely capped the upside and cut the rally short.
That’s where on-chain adds some signal. Despite the rally, Bitcoin’s MVRV Z-Score only peaked at 2.89. Elevated, sure, but still well below the danger zone (3.0-4.0) where blow-off tops usually form.
Source: Glassnode
Translation: Bitcoin moved fast, but we didn’t get the kind of overheated sentiment that typically marks a cycle top.
Therefore, if BTC.D starts printing higher highs and alt flows stay muted, this could shape up as the early innings of a renewed Bitcoin-led leg, not a cycle peak.
