Bitcoin dominance weakens as altcoins rally, with analysts warning of a September correction after the Fed rate decision.
Bitcoin’s dominance in the cryptocurrency market is showing weakness, and altcoins are experiencing stronger moves. Analysts are watching closely as both technical patterns and macroeconomic factors suggest a possible shift in market direction. Analysts are pointing to early September as a potential turning point.
Altcoin Momentum Builds as Bitcoin Dominance Drops
Altcoin markets have been gaining traction as Bitcoin dominance shows weakness on key charts. Ito Shimotsuma, a market analyst, wrote that “Bitcoin dominance is probably the worst-looking chart right now. And this is the most bullish thing for alts.”
He added that the Federal Reserve’s recent signal of a rate cut next month could further extend the altcoin rally. Shimotsuma suggested that altcoins may continue to rise until the first week of September, followed by a correction before another leg higher in the last quarter.
The rally in alternative tokens has been supported by increased trading volumes in smaller projects. Market participants believe that retail investors are shifting funds into altcoins as they expect higher returns compared to Bitcoin in the short term.
Analysts Expect Correction Following Federal Reserve Decision
Doctor Profit, a well-followed market analyst, issued a detailed report on the broader crypto outlook. He argued that the upcoming Federal Reserve meeting on September 17 may trigger a market-wide correction. According to him, “once the FED starts cutting rates, we usually see a strong correction afterwards.”
He stated that this rate cut could differ from previous ones, as it may represent the first meaningful policy shift in years. Doctor Profit explained that major corrections tend to occur only after the first major cut, when uncertainty increases and retail positioning becomes vulnerable.
The analyst also described how market psychology plays a key role, saying that large wallets accumulate during dips while retail investors often buy late. He noted that retail traders entered Bitcoin between $110,000 and $120,000, making them prone to losses if prices fall to the $90,000–$95,000 range.
Technical Outlook Points to Pressure on Bitcoin
From a technical perspective, Bitcoin charts are showing signs of pressure, according to Doctor Profit’s analysis. He pointed to a CME gap near $93,000 and reduced volume as reasons for expecting further downside. He also mentioned multiple bearish divergences on both daily and weekly charts.
The analyst explained that the recent pump was driven more by futures than spot buying, which adds to market risk. He noted that retail enthusiasm has been high, but large funds and ETFs have seen outflows instead of inflows, which shows a lack of strong institutional demand.
In his trading approach, Doctor Profit said he has been taking daily profits from Bitcoin and Ethereum since mid-August. He is building short positions in Bitcoin while keeping part of his portfolio in cash. His strategy expects a correction in September before both Bitcoin and Ethereum reach new highs later this year.
