## Bitcoin Dominance Breakdown Despite Market Crash

### Overview
Despite widespread market weakness following the Fed's hawkish stance and overall crypto sell-offs, Bitcoin dominance is exhibiting unusual breakdown behavior that suggests altcoins may be positioning for relative strength—a counterintuitive development that both analysts find significant.

### The Anomalous Dominance Breakdown

**Coin Bureau Trading** identifies a remarkable divergence in market behavior during the recent 24-hour crash period [8yv4uSHM9rk @ 02:00]. Contrary to typical crisis behavior where investors flee to Bitcoin's relative safety, Bitcoin dominance is actually breaking down on the daily timeframe [8yv4uSHM9rk @ 02:23]. This suggests that rather than panic-selling altcoins or rotating into Bitcoin during weakness, market participants are either buying more altcoins or actively rotating out of Bitcoin into altcoins [8yv4uSHM9rk @ 02:34].

The technical pattern shows an ascending wedge formation that has been tracked throughout the year, similar to the breakdown pattern observed from spring into summer [8yv4uSHM9rk @ 02:42]. The wedge is breaking down and squeezing to the downside on the daily chart—not an hourly or 4-hour timeframe, but the more significant daily timeframe [8yv4uSHM9rk @ 02:56]. This breakdown suggests altcoins are outperforming Bitcoin, which "logically should not be happening if there was really a panic and a flight to safety" [8yv4uSHM9rk @ 03:07].

### Historical Context and Parallels

**Into The Cryptoverse** provides crucial historical perspective, noting that Bitcoin dominance in 2019 was at similar levels just before a significant market top [PvDskt21bnI @ 27:05]. During that period, Bitcoin dominance exploded higher as Bitcoin USD went to new highs while the altcoin market bled away [PvDskt21bnI @ 27:20]. This pattern has characterized the entire current cycle, with Bitcoin reaching higher highs while most altcoins fail to achieve new all-time highs [PvDskt21bnI @ 27:33].

The channel draws a striking comparison to late October/early November 2017, when total 2 minus USDT divided by Bitcoin was at the exact same valuation as today [PvDskt21bnI @ 28:05]. Following that period, the market experienced multiple waves: an initial decline, followed by a rally, another drop, and then a larger rally [PvDskt21bnI @ 28:21].

### Implications for Altcoin Performance

**Consensus View**: Both analysts agree that if the dominance breakdown continues, altcoins could outperform Bitcoin in the near term. Coin Bureau Trading notes that combining the dominance breakdown with bottoming patterns visible in Bitcoin, Ethereum, and large-cap altcoins suggests "altcoins could actually outperform Bitcoin when we do get this rally" [8yv4uSHM9rk @ 03:43].

**Divergent Timelines**: However, Into The Cryptoverse presents a more cautious longer-term outlook, suggesting that altcoin liquidity will likely flow back to Bitcoin, with December typically being Bitcoin's month for liquidity dominance [PvDskt21bnI @ 28:38]. The channel proposes a scenario where Bitcoin pairs could drop into early November, experience a counter-trend rally as markets prepare for the end of quantitative tightening, then see Bitcoin liquidity take over in December before all Bitcoin pairs potentially find a low [PvDskt21bnI @ 28:31].

### Market Structure Context

The dominance breakdown is occurring against a backdrop of ongoing bottoming patterns. Coin Bureau Trading emphasizes that despite bearish price action, the technical structure remains intact, with "some kind of double bottom or W bottoming pattern out of these recent lows" visible across Bitcoin, Ethereum, and other altcoins [8yv4uSHM9rk @ 01:23]. This suggests the recovery trend identified earlier is "still technically intact" despite the chop [8yv4uSHM9rk @ 01:21].

Into The Cryptoverse notes that in the current environment of uncertainty, Bitcoin remains the preferred hold because "dominance will likely go up" over the longer term [PvDskt21bnI @ 27:48], even while acknowledging short-term altcoin strength possibilities.

### Key Takeaway

The Bitcoin dominance breakdown represents a critical market anomaly: during a period when fear should drive capital toward Bitcoin's relative safety, the opposite is occurring. This suggests either strong conviction among altcoin holders or sophisticated positioning for an anticipated altcoin rally. However, analysts remain divided on whether this represents a sustainable shift or a temporary phenomenon before Bitcoin reasserts dominance, particularly as quantitative tightening ends in December and traditional year-end Bitcoin liquidity patterns emerge.