Bitcoin dominance talks about the impact of the Bitcoin market cap on the entire crypto industry market cap. It is because Bitcoin is the most popular cryptocurrency and has the largest market capitalization, which gives it the power to impact the behavior of the crypto market.
Just recently, Bitcoin Dominance surged to the highest point in three years, breaking the odds. In this blog, let us discuss what is happening with Bitcoin Dominance and how it will impact the crypto market.
Bitcoin Dominance Surged To 54%
For almost three years, Bitcoin Dominance was steady at around the 52% mark, but now it has peaked above 54%, indicating both positive and negative news. Positive, as it shows the increased demand for Bitcoin in the market which usually leads to the Bitcoin price surge.
However, the increased dominance does not have the same positive impact on the altcoins as the price starts to decline. This scenario is not always correct due to the complex relationship between Bitcoin dominance and the crypto market.
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Despite the increased Bitcoin Dominance, the bitcoin price has faced a decline in the last few days. Earlier, Bitcoin was trading above the $71k mark, but now the price has dropped 10% within a week.
As of now, the Bitcoin price has followed a downtrend where the value has dipped to $64,278. More importantly, the Bitcoin price fell to a low of $62K before this, which is the lowest value of the last 25 days.
This price fall justifies the increased Bitcoin Dominance because of the liquidation issues. However, it has helped Bitcoin surge to the maximum dominant percentage of 54%, last seen in April 2021.
Compared to the last day’s value, Bitcoin has succeeded in making a slight recovery.
Effect of Bitcoin Dominance On Rest of the Market
The crypto market heatmap reports a green zone in the case of most of the cryptocurrencies where despite the price falls, the cryptocurrencies are above the average value. Ethereum, for now, is trading at $3,166.23, the lowest point of the entire month. The prices are up compared to yesterday, as Bitcoin dominance was even higher at that time.
This is the case with all the other cryptocurrencies, as BNB is at $565.59, Solana is at $143.43, and Cardano is at $0.4682, etc.
A crypto trader on X said” The actual hit on $BTC was very minimal, and the total downside also wasn’t very relevant. The real damage was done in the #Altcoin sector, which wiped out billions of Open Interest and caused wicks of up to 50 percent”
Also Read: 5 Top Altcoins Outperforming Bitcoin This Year
At the same time, another crypto enthusiast has called it the direct indicator of the upcoming altcoin bull run. According to him, before every bull market, Bitcoin dominance surged the same, and the altcoin market cap is showing the same trends as it did in the last bull run.
This is the last shake-off before it rips explosively upward coupled with Bitcoin dominance downward trend,” said Mikybull Crypto
Is There A Bull Run Ahead?
From the start of 2024, the crypto market has continuously maintained an extreme greed zone with the indication of a long-term bull run. But that has come to an end with this recent market fall where the fear and greed index has reported a 65 score, the lowest score of the last three and half months.
Despite that, multiple analysts have claimed a prolonged bull run based on previous Bitcoin dominance data and the upcoming Bitcoin halving event. Both of these factors have a proven history of initiating a correction zone, bringing the crypto market down before entering a bull run lasting for months.
Conclusion
The current surge in Bitcoin dominance has shaken the crypto market, where the majority of cryptocurrencies have lost days of gains under this correction zone. Now, the Bitcoin halving event is the most anticipated time for initiating the market recovery and the most awaited bull run. Though analysts have predicted a bull, the crypto market is unpredictable, with multiple possibilities.
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Read More: Bitcoin Dominance Surged To Three Year High; What Will Happen Next? | CoinGape
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