Bitcoin (BTC.D) dominance within the cryptocurrency market has reached its highest point since 2021. This rise coincides with a rise in the price of Bitcoin for several months, indicating a growing preference for Bitcoin and Bitcoin-based investment products.
However, this surge in dominance has raised concerns among analysts. Some believe it signals a local top for the currency, hinting at a possible short-term price correction.
Bitcoin's dominance may be coming to an end
Bitcoin dominance measures the market cap of the leading cryptocurrency relative to the total market cap of all other cryptocurrencies. At the time of writing, it stands at 58.76, its highest level since April 2021.
The rise in BTC.D indicates that Bitcoin maintains a significant share of the market. However, since peaks in dominance often coincide with market tops, analysts often consider this metric an indicator of different market cycles. Some believe that the current rise in BTC.D indicates that Bitcoin may soon reach a local top.
In a post on October 14, crypto analyst Ilja Bohm noted that Bitcoinâs dominance is about to drop significantly, signaling the start of altcoin season.
âBitcoinâs dominance is about to collapse severely. This will push altcoins to new heights. Altcoin season is coming,â he stated.
Furthermore, cryptocurrency investor Coach K Crypto noted in a post on X that Bitcoinâs dominance has peaked for this cycle, and altcoin season could start soon.
âBitcoin (BTC.D) dominance has reached its highest level of this cycle. It hasnât been this high since 2021. We need to let Bitcoin outperform before anything else happens. Soon, there will be a BTC.D crash. This will give major altcoins and memes a chance,â Coach K Crypto said in an Oct. 16 post.
Additionally, in a post on X on Wednesday, Benjamin Cowen expressed his opinion that Bitcoinâs dominance could reach around 60%. Sharing the same opinion, popular analyst Michael Van de Poppe said that BTC.D has reached or is approaching its peak.
To fully confirm this, there would need to be a divergence between the price of Bitcoin and BTC.D. This pattern suggests that the momentum behind the price of Bitcoin may be declining. However, Bobby noted that this bearish divergence has yet to be fully validated, meaning there is no conclusive evidence to confirm a reversal in the current trend.
Bobby added that the possibility of a market reversal depends on the performance of Ethereum (ETH). If ETH manages to break the crucial 0.04 resistance level in terms of its dominance, it could lead to a broader reversal in the crypto markets.
This breakout could indicate increased investor confidence in ETH and could lead to more funds flowing into altcoins, leading to a major shift away from BTC.
Altcoin season still a long way off
Altcoin season begins when at least 75% of the top 50 altcoins outperform Bitcoin over a three-month period. Only 20 of these assets have outperformed Bitcoin in the last 90 days. Therefore, altcoin season has not arrived yet.
Furthermore, the ETH/BTC ratio, which tracks Ethereumâs performance compared to Bitcoin, is nearing its lowest level in three and a half years.
A declining ratio often reflects a preference for Bitcoin and a shift away from ETH and other altcoins.
#MarketDownturn #BinanceTurns7 #Bitcoin #elaouzi #ETHETFsApproved