The market appeared stable in terms of price, but there were signs of underlying stress in the dominance charts.
USDT Dominance surged towards a four-year resistance level, while BTC Dominance reversed course after forming a rising wedge pattern.
Altseason 1.0 occurred in 2017, followed by Altseason 2.0 in 2020-2021. As we move into 2026, traders are speculating on the emergence of Altseason 3.0. What does the data indicate?
USDT.D Hits Resistance
USDT Dominance reached 9%, the same level that had marked turning points in previous cycles. The weekly chart showed a sharp rejection, indicating a lack of continuation.
Source: ParaboliXBT on X
RSI was approaching 78, indicating overbought conditions on the weekly timeframe. Historically, such high readings at long-term resistance levels did not hold, confirming the significance of the rejection.
The previous rejections at 9% levels had led to strong movements back into risk assets, suggesting that stablecoin demand was overstretched, with capital flowing into safety assets too late.
BTC.D Breaks Wedge Pattern
BTC Dominance formed a rising wedge pattern on the weekly chart, but the price broke below the lower trendline of the wedge.
Source: TradingView
The most recent candle closed around 58.99%, indicating a pause in the price movement after the wedge pattern.
Momentum indicators showed signs of weakening, with MACD lines turning downwards and RSI cooling off.
If the wedge support is quickly reclaimed, it could negate the bearish outlook and delay any rotation narratives, keeping the dominance setup in a precarious position.
Market Sentiment at a Low
Sentiment hit extreme fear levels in February, reminiscent of the panic during the COVID crash and the FTX collapse.
Bitcoin [BTC] experienced a 51% decline from its October 2025 peak and currently trades 46% lower, reflecting overall market stress.
Source: X
Extreme fear levels have historically signaled major buying opportunities rather than market tops, aligning with the weakness seen in the dominance charts.
Panic selling intensified as confidence waned in the broader crypto market, often preceding a significant shift in market dynamics.
Altseason Outlook for 2026
In order for an altcoin rotation to materialize, USDT Dominance must continue to decline from resistance levels, and BTC Dominance must remain weak post-wedge break.
If both indicators weaken simultaneously, liquidity could flow into higher-risk assets. Any rebound in either indicator could reset the setup.
As a result, the possibility of “Altseason 3.0” remains a potential scenario, not yet confirmed.
Final Summary
- USDT Dominance faced rejection near 7.96% resistance with RSI at 78.75, indicating overextended defensive positioning that may reverse with further selling pressure.
- BTC Dominance broke a rising wedge pattern and hovered around 58.99%; sustained weakness in both dominance charts could pave the way for outperformance in altcoins.