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As Bitcoin (BTC) inches closer to $70,000, its dominance of the broader crypto market has risen to a cycle high of 58.9%.
Bitcoin Dominance Rises, Are Altcoins In Trouble?
Bitcoin dominance (BTC.D), a metric that measures the share of the total cryptocurrency market dominated by the leading digital asset, hit a new cycle high of 58.9%. The last time the crypto market witnessed this level of BTC.D was April 2021.
After a slight retreat following Iran’s attack on Israel earlier this month, Bitcoin is up nearly 10% in the past week, trading at $67,769 at the time of writing.
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At the same time, the total crypto market increased from $2.26 trillion on October 8, to $2.41 trillion on October 16, according to the report. the data from CoinGecko. However, the increase in the overall value of the crypto market is mainly fueled by the increase in the price of BTC.
At the beginning of October, BTC.D hovered around 57.1%. Since then, it has increased by about 1.8%, showing the strong performance of Bitcoin compared to altcoins such as Ethereum (ETH), Solana (SOL), Binance Coin (BNB), and others.
The current level of BTC.D has cast doubt on the strength of the long-awaited “altseason”, which is usually characterized by a corresponding price increase in altcoins and a decrease in BTC.D. Notably, BTC.D reached 70% during the post-COVID bull market in 2020-21 before falling to 40% in mid-2021.
Towards the end of 2022, BTC.D fell by about 39% amid the collapse of FTX, which halted operations due to fraud charges against its leadership. Since then, BTC.D has been steadily growing, as shown in the chart below.
ETH/BTC Ratio Should Rebound in Possible Altseason
As BTC.D continues to rise, it is important to consider ETH/BTC trading. For the uninitiated, the ETH/BTC trade – known as the ETH/BTC ratio – tracks the performance of Ethereum (ETH) against BTC.
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At the time of publication, the ETH/BTC trading pair stands at 0.0385, a level last seen in April 2021. The chart below shows that Ethereum has failed to establish a higher level against Bitcoin since at least November 2022, it shows. weak ETH price action over the past two years.
The strong performance of ETH against BTC often predates the previous season, but there are no clear signs of a meaningful trend reversal.
In addition, the total value locked (TVL) in decentralized finance (DeFi) protocols on all blockchains has. it’s slippery from about $110 billion in June 2024 to $88 billion, which shows the weak demand for altcoins among crypto investors.
However, some crypto analysts and technical indicators still suggest that a potential altseason may be on the horizon.
For example, earlier this month, the altcoin market cap exceeded its 200-day exponential moving average (EMA), the main resistance level that shows the strong performance of the altcoin in recent days.
Similarly, Steno Research recently he commented that ETH is set to bounce back following the US Federal Reserve (Fed) interest rate cut. BTC is trading at $67,769 at press time, up 2.5% in the last 24 hours.
Featured image from Unsplash, Charts from Tradingview.com
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