Bitcoin (BTC) may be close to its cycle peak
Bitcoin (BTC) may be close to its cycle peak, with Ethereum (ETH) and altcoins potentially next in line for strong gains, according to market analyst Cyclop (@nobrainflip). His view is based on a recurring rotation pattern seen both in the 2017 and 2021 bull markets.
Past Cycles Show a Clear Rotation Sequence
In cryptocurrency, a market cycle refers to the pattern from a bull market peak through a bear market low and back to a new peak. In December 2017, BTC reached nearly $19,000 before its market dominance — the percentage of total crypto market value held by BTC — dropped from about 70% to 60% over a month. A drop in BTC dominance means money is flowing into other cryptocurrencies. This often signals the start of an altseason, a period when smaller coins rise much faster than BTC or ETH. That 2017 altseason lasted two months, during which the total altcoin market cap surged 828%.
In November 2021, BTC hit $69,000. Within 28 days, BTC dominance fell from 70% to 38%, leading to another altseason. That month-long run saw the altcoin market cap grow 221% before the entire market reversed.
BTC dominance is now 60.76%, down from a recent high of 67.5% in July. The Relative Strength Index (RSI) for BTC dominance is 40.03, close to the 30 level considered oversold. RSI is a momentum indicator ranging from 0 to 100. If the RSI is above 70, that suggests strong buying and possible overbought conditions. If it is below 30, that suggests strong selling and possible oversold conditions. Historically, a drop in BTC dominance combined with weak RSI momentum has preceded capital rotation into ETH and other altcoins.
If BTC’s July 14 all-time high of $122,838 holds as the cycle peak, historical patterns suggest ETH could rally for three to four weeks after BTC tops. History suggests that an altseason would then last 30–40 days after that.
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The ETH/BTC ratio — the price of ETH measured in BTC — is 0.03522, up 30% from 0.027 in mid-June. When this ratio rises, ETH is outperforming BTC. Its RSI is 68.07, near the 70 level that signals strong buying momentum.
ETH is trading at $4,298, 11.9% below its November 2021 all-time high of $4,878. Over the past 30 days, ETH has gained around 22%, outpacing BTC’s 14% rise in the same period.
ETF flows track the net amount of money entering or leaving Bitcoin exchange-traded funds. These funds are a common way for institutional investors to gain BTC exposure. Positive flows suggest more buying demand, while negative flows suggest selling or reduced interest.
According to Farside Investors, Bitcoin ETFs have seen a net inflow of $403.9 million so far in August, after net outflows of $812 million last week. Sustained positive flows often support BTC prices late in a cycle, while slowing or negative flows have sometimes coincided with traders rotating into ETH and altcoins.
Why This Cycle Could See Smaller Losses After the Peak
In the 2017 and 2021 cycles, BTC fell 70–80% from its peak to the bottom of the bear market. Cyclop expects a smaller 60% drop this time, citing BTC’s larger market capitalization and stronger institutional participation. A 60% decline in Bitcoin’s price from the $122,838 high would put BTC near $49,000.
Despite this, altcoins remain far riskier. In past cycles, many fell 80–90% after their peaks, even when BTC’s decline was smaller.
Unlike earlier peaks, when skepticism and “BTC is a bubble” headlines were common, this cycle has seen banks and funds adding BTC and ETH. Still, Cyclop warns that markets often reverse when sentiment “feels too good.” He added that an unexpected “black swan” event — a rare, unpredictable shock — could cause a faster and deeper decline.
Cyclop said he has already sold 30% of his ETH holdings. He explained that selling in stages during rallies is safer than trying to sell everything at the exact top.
Cyclop’s outlook would be supported if Bitcoin dominance falls below 60% and ETH/BTC holds above 0.035–0.036 with rising RSI. A rebound in BTC dominance toward 62–63% or an ETH/BTC drop below 0.033 could weaken the case for an imminent altseason.