Bitcoin may be approaching another leg lower as stablecoin dominance rises and short term technical indicators weaken, according to recent market analysis. After breaking below near term support within a parallel bear flag formation, Bitcoin is now seen potentially testing the 65000 to 63000 dollar range before attempting a stronger recovery.
Momentum indicators on lower time frames remain negative, with analysts noting that a sustained rebound would require reclaiming previously broken trendline support. The recent pullback follows a period of range bound trading and fading upside momentum, suggesting that buyers have yet to regain control.
Ethereum is showing a similar technical structure. Price action on ETH mirrors Bitcoin’s setup, with traders watching channel support levels and volume patterns for signs of oversold conditions. Without a clear surge in demand, both leading assets appear vulnerable to additional short term pressure.
One of the key macro signals attracting attention is the rise in combined stablecoin dominance. Stablecoin dominance measures the share of total crypto market capitalization held in dollar pegged tokens. A rising figure often indicates that traders are moving capital out of volatile assets and into cash equivalents. Weekly momentum readings for stablecoin dominance are elevated, reaching levels last observed during mid cycle stress periods in previous market downturns.
Historically, spikes in stablecoin dominance have coincided with defensive positioning ahead of deeper corrections. However, some analysts argue that extreme readings can also signal proximity to market bottoms, as sidelined capital builds that may eventually rotate back into risk assets. For now, most on chain metrics have not yet reached classic capitulation zones, implying the possibility of continued consolidation before a decisive directional move.
Bitcoin dominance remains near 58 percent, a level often associated with defensive market conditions. Altcoin dominance shows intermittent strength but lacks sustained conviction. Broader total market dominance indicators are mixed, with some divergence signals failing to generate lasting rallies in recent months.
Traditional financial markets are also contributing to caution. The U.S. Dollar Index is firming, while equity futures remain in consolidation patterns. Elevated volatility expectations, reflected in fluctuations of volatility indices, could spill over into digital asset markets.
Commodity markets show mixed signals, with crude oil facing potential pullback patterns and precious metals trading within consolidation zones. Global equity indices in Asia present divergent trends, adding to the uncertain macro backdrop.
Altcoin performance has been uneven, with several smaller tokens posting sharp weekly declines. Such moves often precede broader sentiment shifts across the crypto complex.
Until a clear capitulation event or strong technical reversal emerges, traders are closely monitoring stablecoin flows, dominance metrics, and support levels in the 63000 dollar region for Bitcoin. The interaction between defensive capital positioning and technical structure will likely shape near term direction across the digital asset market.
