BTC Dominance
Bitcoin Dominance is often used as an indicator of Altcoin Market trend and direction. Currently, it is sitting around 41%, slightly above a multi year low of 39.9% which was recorded on May 17th 2021. Below is the chart from Coinmarketcap site.
We can see the market caps of Ethereum and other Altcoins breaking out after a long consolidation. All of this seem to mirror the price action and movement of BTC Dominance which happened in the middle of the 2017 Bull Market. After a price rise of alts and $ETH reaching close to $BTC, the markets dipped allowing a rise in BTC Dominance, only to come back lower around the Market peak late 2017-early 2018. It’s seen that the market topped out after Bitcoin Dominance made a Bottom and then bounced strongly from there.
The sentiment in crypto space right now is one of fear and uncertainty. Bitcoin has dropped 50% from the high of $64000 and consolidating with lower volumes. Bitcoin price took a massive hit after Elon Musk voicing concern over the environmental impact of mining, along with bad news from China. Altcoin prices were greatly affected in the panic sell-off. Coins like Solana, Ethereum meanwhile have recovered better than Bitcoin. The dominance is consolidating at present with potential for a bounce and then dipping lower as the Alts gain strength later on. More significantly, the Bottom doesn’t seem to be in for BTC Dominance yet. The months ahead will be interesting, looking at the trend set in 2017.
