Altcoin Market Nears Bottom as Bullish Divergence Builds Momentum

Altcoin dominance drops to 7.56% amid prolonged weakness but shows early signs of bullish divergence.

Key support lies between 3–4%, with resistance near 8.3% and 10.8%, marking critical reversal zones.

Reduced volatility and narrowing candles suggest early accumulation and possible sector stabilization.

Analyst Javon Marks highlighted a potential shift in the altcoin sector. He says a regular bullish divergence is visible in the dominance performance of smaller-cap cryptocurrencies.

The data, which tracks the OTHERS.D index—or the total crypto market capitalization excluding the ten largest assets—suggests that the altcoin market may be approaching a stabilization phase after a prolonged decline.

Javon Marks explained that while altcoin dominance has steadily weakened since 2023, technical signals now show early signs of momentum recovery.

Prolonged Weakness Followed by Potential Rebound

Over the past two years, altcoin dominance has fallen from double-digit levels to around 7.56%, marking a decline marked by lower highs and lower lows. This sustained drop reflects reduced capital inflows into smaller altcoins as traders favored Bitcoin and other major assets.

Despite this extended downturn, the data reveals that selling pressure could be fading, as recent candles indicate attempts to form a base near 7% support. The MACD momentum indicator has also shown a contrasting movement. While dominance continues to register lower bottoms, the MACD is forming higher lows.

This divergence between price and momentum often appears when market weakness begins to slow, suggesting possible strength building under the surface. Such formations historically precede reversals in prolonged bearish phases.

Critical Support and Resistance Zones

Technical observations from the broader timeframe show that dominance recently declined toward 6.70%, after briefly rebounding from a multi-year low near 4.0%, marked by a sharp rejection wick.

The support structure lies between 3.0% and 4.0%, a range that previously acted as a base during the 2016–2017 cycles. On the upper end, notable resistance zones stand near 8.3% and 10.8%, levels where selling pressure previously resumed.

A move above the 9–10% area could serve as the earliest sign of a structural reversal. However, failure to sustain above 7% may trigger further losses toward 6% or below, maintaining the longer-term bearish formation that began in 2021.

Emerging Signs of Accumulation

Although market dominance remains under pressure, several indicators highlight accumulation near historical support. The narrower candle formations and reduced volatility seen recently suggest a cooling phase occurring before market realignment.

Analysts tracking this development note that such stabilization patterns often accompany the early stages of capital rotation across crypto sectors.

Marks emphasized that while the data remains technically neutral, the observed divergence presents the first measurable signal of potential strength within smaller altcoins. With Bitcoin and major assets holding significant market share, continued observation of dominance behavior will determine whether this signal develops into a broader recovery phase.

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