Bitcoin Dominance Reaches Its Cycle Top as Market Rotates to Altcoins

Raul Pal, the founder of Real Vision, has predicted that the cycle top in Bitcoin (BTC) dominance has been reached amid a broader uptrend.

In a commentary on X Wednesday, the market veteran said technical signals, specifically DeMark tops, suggest there could be a potential turning point for BTC's market share, which has seen a steady climb since December 2024.

"Yes, we are still in the Banana Zone...," said Pal. "Banana Zone Phase 1 was the break out last year, now the consolidation (like the 2016/17 consolidation after phase 1). This won't last long... Next up Banana Zone Phase 2 - The 'Banana Singularity' (Alts szn) when everything goes up..."

Notably, Pal cited DeMark Indicators, developed by industry legend Tom DeMark, as the tools indicating this market top. These tools identify reversals by overextended price trends.

In this case, Pal noted that daily, weekly, and monthly DeMark tops have aligned for Bitcoin dominance, suggesting that its upward trajectory may be nearing exhaustion. While he failed to call out the specific DeMark indicators, popular ones such as the TD Sequential could have been useful for identifying this top.

"After a magnificent run, it seems like we may be topping out of the Bitcoin cycle and into the Banana Zone's second phase: a period of more significant and faster increase in altcoins as capital rotates out of BTC and into riskier assets," said Pal.

After reaching a high of 73.63% in 2021, Bitcoin dominance is now showing signs of fatigue, having not yet reached the highs observed in 2017.

At the time of writing, Bitcoin dominance stands at 64.8%, highlighting the cryptocurrency's resilience in a market that has seen little action in recent months.

While Bitcoin has risen by 6.6% year-to-date in 2025, currently trading at $99,458 as it approaches the $100,000 milestone, the altcoin market has struggled to keep pace.

The TOTAL2 index, which tracks the crypto market excluding Bitcoin, has seen a 19.67% decline this year, dropping from $1.34 trillion to $1.07 trillion. This disparity has contributed to Bitcoin's dominance steadily increasing, with May 2025 set to mark the sixth consecutive month of gains.

However, Pal's prediction suggests that the tide may soon turn in favor of altcoins. To describe what comes next, Pal introduced the "Banana Zone," a term coined by himself.

This term refers to a phase in the crypto market cycle where prices generally explode, creating a parabolic, banana-shaped price curve on charts. He divides it into three phases, with the first phase being the initial breakout for all assets, which occurred in November 2024.

This first phase, also known as the "Banana Breakout," is characterized by a strong and rapid increase in price, typically from a deep and prolonged bear market. As the market momentum builds, it attracts more and more participants, leading to a frenzy of buying activity.

The second phase, according to Pal, is the "Banana Singularity," which involves a period when altcoins experience more uptrend after consolidating, outpacing Bitcoin as investors seek higher returns in riskier assets. This second phase typically follows a peak in Bitcoin dominance, as capital rotates into altcoins.

This shift in capital flows usually results in a decline in Bitcoin dominance and a surge in altcoin market share, also known as "altcoin season." During this time, altcoins, such as Ethereum (CRYPTO: ETH), tend to outperform Bitcoin significantly, reflecting a broader market interest in riskier assets.

The third and final phase of the Banana Zone is marked by a return of dominance to Bitcoin as the market cycle reaches its apex. This phase is characterized by a strong rally in Bitcoin price, outperforming altcoins and ultimately leading to a peak in the overall crypto market cap.

As the cycle culminates, Bitcoin's dominance is expected to return to high levels, signifying its role as the primary cryptocurrency and a safe haven for investors during times of market stress.

This prediction aligns with the observations of other analysts, such as Merlijn the Trader, who suggested that the altcoin season has observed a trigger.

According to Merlijn, the dominance of the Bitcoin season is "cracking," arguing that those who do not position themselves for this shift will become exit liquidity later.

"If you’re not positioned now, you’ll be exit liquidity later. Alts are loading. You either lead or get left," stated Merlijn in a commentary on Wednesday.

Moreover, market analyst Crypto Goos noted that Bitcoin dominance might be breaking down soon, identifying a rising wedge structure that has persisted since 2