Analyst Predicts Bitcoin Dominance Unlikely to Reach Previous Highs
Benjamin Cowen, founder of Into The Cryptoverse, doubts that Bitcoin (BTC)’s market dominance will return to its December 2020 levels, before the asset's price surged dramatically. Cowen stated, "I don’t think it is going back up to 70%; my target for Bitcoin dominance has been 60%."
Currently, Bitcoin dominance stands at 57.36%, a rise of 4.25% since mid-July, according to CoinMarketCap data. Since January 1, it has increased by 11.20%. Cowen explained that during major altcoin seasons, such as the one experienced in 2021, Bitcoin's dominance, the ratio of Bitcoin’s market capitalization to the entire crypto market, tends to decline but gradually climbs back.
However, Cowen remains confident that this cycle will not see Bitcoin reaching its past dominance levels. Cowen believes there is ample space for Ethereum and other cryptocurrencies, predicting Bitcoin will move toward 60% dominance between September and December.
Traders often watch Bitcoin dominance levels as a cue to sell Bitcoin and invest in alternative assets like altcoins. In December 2020, Bitcoin dominance reached 70.23% before its price soared by about 220% to $61,283 in March 2021, according to CoinMarketCap data.
Cowen highlighted that Bitcoin dominance is more complex now than in 2019 when it peaked slightly above 71%, due to the smaller stablecoin market cap at that time. He advised using a combination of Bitcoin dominance and stablecoin Tether (USDT) dominance to assess "flight to safety dominance." In the recent interview, he mentioned that this combined figure is around 63%, comparable to levels in June 2019, before the Federal Reserve cut interest rates. Currently, the combined dominance of USDT and Bitcoin stands at 63.07%.
