Will Bitcoin (BTC) Price Decelerate As Altcoins Take Up Steam?

Bitcoin (BTC) price has fallen below $30,000 after almost a week. Among other macro factors, the downtrend in critical on-chain data points such as BTC dominance and balances held by long-term investors. Could BTC be in for a mild correction?

After delivering a 70% price increase in Q1, Bitcoin consolidated on its latest rally to hover above $30,000 on April 10. With the global crypto market cap climbing towards $1.26 trillion, investors now appear to be looking beyond BTC as they gain confidence in the broader. the cryptocurrency market.

BTC dominance takes a hit

Bitcoin Dominance (​​BTC.D) has declined by 2 percentage points in the past week. BTC.D tracks the percentage of the total cryptocurrency market cap, including bitcoin’s market cap.

The chart below illustrates how BTC.D has fallen sharply from 49% on April 12th to 47% as of April 17th.

A decline in BTC dominance could indicate a shift in market sentiment towards altcoins. As investors become more interested in altcoins, BTC often loses market share as they may sell some of their Bitcoin holdings to buy other cryptos. Ultimately, this could lead to a short-term decline in the bitcoin price.

Likewise, the decline in balances held by long-term BTC holders further confirms the bearish premise. According to IntoTheBlock, crypto investors who have held their assets for more than 1 year have started selling out of BTC in recent weeks.

Between April 9 and April 17, the long-term HODLers (addresses that held Bitcoin for over a year) unloaded 300,000 BTC worth nearly $9 billion. Meanwhile, balances held by short-term investors and speculative traders have increased by 17% over the past 30 days.

As long-term owners divest, and short-term traders gain more leverage in the market, the asset may experience slow growth and high volatility.

Therefore, long-term crypto investors can look to altcoins for diversification and higher returns. Therefore, BTC may experience a mild correction in the coming weeks.

BTC Price Prediction: Strong Support at $28,300

According to IntoTheBlock’s In/Out of Money chart (IOMAP), Bitcoin is unlikely to fall below $28,000 if the bears hold on for a moment. The IOMAP data helps identify support and resistance zones by tracking the volume of coins traded at different price levels.

As shown below, the bears will likely force a decline, but the 405,000 addresses that bought BTC at an average of $29,300 will pose some challenges.

But if that doesn’t hold, $28,300 is a higher support level. Here, a bullish army of 824,000 addresses with 519,000 BTC will seem to stand its ground.

Bulls could get more wind in their sails if the Bitcoin price breaks above the recent local high around $30,750. But the 1.3 million addresses holding 633,000 BTC could slow the rally as they look to book profits.

However, if Bitcoin breaks this resistance, it could head towards the next significant resistance at $33,000.