The cryptocurrency market is gaining momentum as Bitcoin breaks through $100,000 on May 8th, reaching its highest level since early February 2025.
This milestone added nearly $300 billion to the total cryptocurrency market capitalization, sparking heated debate about the next moves of Bitcoin and altcoins.
Reasons for the 'BANANA Zone' to be Triggered?
Veteran investor and Real Vision founder Raoul Pal believes Bitcoin dominance (BTC.D) peaked on May 8th, 2025.
According to TradingView data, BTC.D dropped from 65.3% to below 64% in just two days, representing the sharpest decline after two months of steady increase.
Pal provided a broader perspective. He pointed out that the current BTC.D peak is lower than the peaks in 2021 and 2017, which aligns with historical patterns. He predicted this could signal the next stage of the "Banana Zone", a term describing cryptocurrency prices surging in a parabolic form creating a banana-shaped curve on the chart.
"I think BTC dominance peaked today. There are daily, weekly, monthly DeMark peaks, and the peak is much lower than the 2021 peak, which is lower than the 2017 peak. If this materializes, this is characteristic of the next stage of the Banana Zone," Raoul Pal predicted.
The "Banana Zone" often coincides with an altcoin boom. Investors typically move funds from Bitcoin to altcoins in search of higher returns.
However, not everyone agrees with Pal's view. Analyst Mark Hervey countered on X, arguing that Bitcoin dominance is returning to 100%. Hervey claimed that the increase in spot Bitcoin ETFs and strong institutional inflows would help Bitcoin strengthen its dominance.
Altcoin Season Index Reaches Two-Month High
Meanwhile, according to CoinMarketCap's Altcoin Season Index, the index has reached a two-month high of 41. While still not reaching the 75-point threshold that defines an altcoin season, the indicator has moved out of the "Bitcoin season" area into a neutral zone, indicating a recovery of positive sentiment.
Well-known analyst Merlin the Trader agreed that the altcoin season has begun. Citing the Blockchain Center index version, he claimed it has broken through recent months' resistance. He added that Tether dominance (USDT.D) is showing a downward trend, which signals a perfect setup for an altcoin season.
"The altcoin season signal just got triggered... Now the index has broken the downtrend of several months. Bitcoin season dominance is showing cracks. If you don't position now, you'll be a liquidity provider later. Altcoins are loading," Merlin the Trader said.
These conflicting views highlight the complexity and unpredictability of the cryptocurrency market. Will Bitcoin's dominance truly reverse and altcoins surge, or will Bitcoin continue to assert its dominance? The market's response may soon provide answers amidst macroeconomic developments and changes in investor sentiment.
