Bitcoin dominance keeps rising. What does that mean for the crypto market and altcoins specifically?
- Bitcoin Dominance Rising
- Altcoins: Where They At?
Bitcoin Dominance Rising
Bitcoin dominance is now up over 19% from its lows, highlighting an intra-crypto market liquidity flow back to BTC after aggressive dispersion throughout 2021. pic.twitter.com/CM1LZGYkHx
— Will Clemente (@WClementeIII) June 3, 2022
One of the strengths of the most recent bull market was the rise of altcoins. Thanks to the likes of Cardano and Solana exploding in market cap, crypto as a whole was able to get over the two trillion mark in global market cap. However, that was also the case, though to a lesser degree in the 2017 bull market. And there are signs that this bear trend is heading the same direction as 2018.
As retail retreated from altcoins after the 2017 high, Bitcoin dominance grew again. As Bitcoin on-chain analyst Will Clemente’s chart above shows Bitcoin dominance stayed steady between the years of 2018 and 2021.
As Clemente’s chart points out, there is a significant increase in Bitcoin dominance of late. It was stagnant through out most of the year so far, but the last few months has seen a significant increase. Like he points out, Bitcoin dominance is up 19% from its lows.
The move makes sense because Bitcoin is considered the safest asset among crypto investors. Even during 2021’s mini-bear trend, there was an increase in Bitcoin dominance from May until to July. This isn’t unusual behavior from investors.
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Altcoins: Where They At?
Altcoins saw their dominance fall back in 2021 before rising up again as the year came to an end. But the outlook right now isn’t so rosy.
Even Ethereum, which is still technically an altcoin, is losing ground to Bitcoin. As Omkar Godbole of Forbes points out, “Ether’s dollar-denominated price has dropped by nearly 55%, while bitcoin, the crypto market leader, has shed over 30%.” This despite the fact that many institutions and famous investors have said they prefer Ethereum long-term to Bitcoin.
However, as we’ve seen of late, interest in altcoins still exist. Cardano recently saw a 30% percent increase over night. It’s DeFi landscape continues to make inroads, making it likely to keep rising. Solana, which keeps getting hit by outages, has made serious inroads with their NFTs getting onto OpenSea.
On the other hand, the world’s biggest altcoin, Ethereum, has struggled of late. But with their merge appearing more and more likely to happen this year, ETH has an excellent price catalyst coming up.
Considering that these three top 10 altcoins still have a lot going for them, it’s unclear how much longer Bitcoin dominance will continue to rise.
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