Raoul Pal, founder of Real Vision and a prominent figure in trading discussions, remarked on Wednesday that Bitcoin’s dominance might have peaked in this market cycle.
In a recent post on X, Pal highlighted signals from DeMark Indicators indicating that a shift could be on the horizon after several months of Bitcoin leading the market. He observed that daily, weekly, and monthly charts are all displaying top signals regarding Bitcoin’s dominance.
Currently, Bitcoin’s dominance stands at nearly 65%, a figure that has risen steadily since December 2024. Despite this increase, it has not yet reached the highs of 2021 at 74% or the earlier peak in 2017. Pal suggests this trend points towards a weakening dominance of Bitcoin within the broader cryptocurrency market.
DeMark Indicators Signal Potential Change
Pal’s analysis relies on the technical tools known as DeMark Indicators, created by market veteran Tom DeMark, which are utilized to identify potential moments when market trends might be losing steam. Although he did not specify the exact signals he monitored, one function of the TD Sequential is to detect such turning points.
I think BTC dominance topped today. There are daily, weekly and monthly DeMark tops in place, and the top is well below the 2021 top and that was below the 2017 top.
If that plays out, it is the hallmark of the next phase of the Banana Zone. Let’s see…
— Raoul Pal (@RaoulGMI) May 8, 2025
As of now, Bitcoin has gained over 6% since the start of 2025, recently reclaiming the $103,000 level and inching towards the $105,000 milestone. However, many alternative cryptocurrencies have struggled to keep pace with Bitcoin’s growth.
The Lagging Altcoin Market
Data shows that the TOTAL2 index, which measures the cryptocurrency market excluding Bitcoin, has dropped almost 20% this year, declining from $1.34 trillion to $1.07 trillion. This disparity between Bitcoin’s growth and the stagnation of other cryptocurrencies has contributed to an increase in Bitcoin’s dominance. If Pal’s assessment holds true, we may soon begin to see this gap narrow.
Pal suggests that as Bitcoin dominance approaches its peak, capital may start flowing into altcoins. Traders typically shift their focus from Bitcoin to smaller cryptocurrencies once they perceive that Bitcoin’s rally has matured. Historical patterns support this behavior, and Pal believes we may witness a similar trend once again.
Understanding the Banana Zone Theory
Pal also introduced his concept of the “Banana Zone.” This term refers to a phase characterized by a rapid, curved price acceleration — reminiscent of a banana’s shape. He categorizes this phenomenon into three stages, with phase one commencing in November 2024 when cryptocurrency prices began to surge.
Pal posits that we are now entering phase two, termed the “Banana Singularity,” where altcoins are predicted to rise more quickly than Bitcoin as investors seek larger returns from riskier options. It’s during this time that we typically see significant movements among smaller tokens.
Anticipating an Altcoin Resurgence
Pal’s conclusion is unequivocal: Bitcoin’s dominance may be waning, paving the way for altcoins to reclaim the spotlight. This shift is not unprecedented; during previous bull markets, investments have historically rotated out of Bitcoin and into altcoins as Bitcoin’s dominance has begun to ebb.
Featured image from Unsplash, chart from TradingView
