Altcoin Rally Gains Momentum as Bullish Divergence and Dominance Shifts Signal Market Rotation

The cryptocurrency market is exhibiting clear signs of a potential altcoin rally, driven by technical indicators and on-chain data that suggest a shift away from Bitcoin dominance. Analysts are highlighting a bullish divergence on the $OTHERS.D chart, which tracks altcoins excluding Bitcoin and Ethereum, indicating underlying strength despite subdued prices. This divergence, where price movement falls while momentum indicators like RSI rise, often precedes reversals and could mark the start of a multi-week or multi-month altcoin trend.

Concurrently, Bitcoin Dominance (BTC.D) has declined to 59.93%, down from June 2025 highs, signaling possible capital rotation into smaller crypto assets. Market watcher Matthew Hyland described the BTC.D chart as bearish, noting a sustained downtrend, while Michaël van de Poppe compared the pattern to late 2019 and early 2020, anticipating further drops in dominance by quarter-end. Trader Don identified a head-and-shoulders pattern on the BTC.D chart, a bearish reversal signal that could accelerate money flow into altcoins.

Social media sentiment reinforces this outlook, with Javon Marks emphasizing that the divergence hints at a huge bullish rotation for altcoins, and Merlijn The Trader stating that altcoin season starts where everyone gives up, pointing to a long, narrowing wedge pattern that has historically preceded rallies. Weekend trading trends show retail traders returning, with notable gains in various altcoins, and the Federal Reserve's expected quantitative easing restart on December 1 could further fuel risk appetite by lowering borrowing costs.

If these signals persist, the market could see outsized gains in smaller-cap tokens, DeFi projects, and Layer 1 networks, though the next few weeks will determine if this shift evolves into a sustained trend or remains a short-term reaction.