Bitcoin’s Dominance Rate Runs Into Familiar Resistance, Hints at ‘Altcoin Season’ Ahead

crypto 4 21 2023 LearnCrypto Powered By Wyckoff SMI 2024

Bitcoin’s dominance may have peaked, one observer said.

The increase in bitcoin’s (BTCdominance rate, or the largest cryptocurrency’s share of the overall crypto market, has halted, hinting at the potential outperformance of alternative tokens known as altcoins ahead.

Altcoins are any cryptocurrency other than bitcoin.

Data from TradingView show bitcoin’s dominance rate rose to 48% from 42% during the first quarter and has struggled to surpass that level so far this month.

The metric has oscillated between 38% and 48% for almost two years, with declines from 46%-48% coinciding with outsized gains in altcoins.

“Bitcoin’s dominance could peak out, this would signal that altcoins would outperform,” Markus Thielen, head of research and strategy at crypto-services provider Matrixport, said in a note to clients on Thursday.

CoinDesk - Unknown
Bitcoin’s dominance rate’s previous declines from 48% coincided with the altcoin market boom. (CoinDesk/TradingView) (CoinDesk/TradingView)

The chart shows that the total market cap of altcoins (white line, blue arrows) rose more than 60% to $1.39 trillion in the two months after the BTC dominance rate turned lower from 48% in July 2021. Similar bearish turnarounds in the dominance rate in mid-October 2021 and June 2022 also pushed altcoin valuations higher.

History could repeat itself, according to Thielen.

“Bitcoin’s dominance appears to be peaking out at similar levels as in 2022 – accounting for 45/46% of the total crypto market capitalization,” Thielen said. “For bitcoin to continue outperforming the rest of the ecosystem would imply that only bitcoin matters, which appears to be unlikely considering the intellectual and financial firepower that is being deployed on other chains.

BY: Omkar Godbole


Please note that our privacy policyterms of usecookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Related Articles