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Breaking News: Fed Lowers Rates By 25bps: How Bitcoin And Crypto Prices Responded And What's Next
bitcoin

Bitcoin Dominance Climbs To Multi-Year High: How Will Altcoins React?

Ash Tiwari
by Ash Tiwari
1 year ago
·
Posted in Bitcoin News
Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure

According to data from TradingView.com on September 17, 2024, Bitcoin market dominance (BTC.D) has crossed 58% for the first time since April 2021. 

Altcoin Season On The Horizon?

Bitcoin dominance essentially tracks the percentage of the total cryptocurrency market cap controlled by BTC. BTC.D has reached levels it had seen three years ago in April 2021. As of September 17, BTC commands a market cap of $1.16 trillion.

Related Reading: Bitcoin Dominance Chart Forms Bearish Wedge Pattern, Altcoin Season On The Horizon

The multi-year high level of BTC.D could have several implications for the altcoins market. A high dominance could trigger the famed “‘altcoin season,” a period where altcoins tend to outperform BTC price action significantly. 

This trend was last observed following the COVID-induced crash of 2020 when the decentralized finance (DeFi) ecosystem piqued industry interest. Several DeFi protocols witnessed huge price appreciation in their tokens, such as AAVE, SushiSwap (SUSHI), Synthetix (SNX). 

Stephen Cook, Founder and CIO of Dira Capital, observed that Bitcoin dominance “is likely close to being done.” He added that it might take a few more months for the metric to reach more than 60%. Cook’s thoughts were echoed by crypto analyst Cryptollica, who noted that BTC dominance may tumble to 35% by mid-2025, potentially paving the way for a 2025 altcoin rally.

A rise in BTC.D could indicate renewed interest in the premier cryptocurrency from institutional and retail investors. After hitting a peak, BTC.D may start sliding down, giving some liquidity to altcoins as the wider crypto market sentiment improves. 

High Bitcoin dominance might provide a sense of perceived stability to investors, who might be encouraged to enter riskier trades in the altcoin market as BTC continues trading in a tight price range. Subsequently, the more risk-seeking investors could buy promising altcoins at a lower price, allowing them to make big gains once Bitcoin dominance starts declining and capital flows into altcoins.

The chart shows that Bitcoin dominance has been on a steady uptrend since at least November 2022, when it stood at 39% and created a double-bottom.

At the time, BTC price was hovering around $20,000 as the US Federal Reserve (Fed) had already started hiking interest rates to combat inflation amid a tight post-COVID labor market.

bitcoin dominance
Source: BTC Dominance on TradingView.com

The Case For Further Altcoin Decimation

Conversely, one cannot completely rule out the possibility of Bitcoin dominance hovering around current levels for some time while altcoins bleed. The proportion could rise further, as emphasized by cryptocurrency trader Rekt Capital, who noted that BTC.D hit a weekly closure above 57.68% for the first time since April 2019. They added:

The last time such a weekly close occurred, it kickstarted a multi-month Bitcoin dominance uptrend to 71%.

Related Reading: Bitcoin Dominance Returns Above 50% As Altcoins Encounter Resistance

In such a scenario, expect more pain for altcoin holders as their holdings severely underperform Bitcoin, leading to a loss of investor interest in small market cap tokens, further depressing their price. At press time, Bitcoin is trading at $59,218, up a modest 1% in the last 24 hours. 

bitcoin
Bitcoin hovers around $59,218 on the weekly chart | Source: BTCUSDT on TradingView.com
Featured Image from Unsplash.com, Charts from TradingView.com
Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.
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Ash Tiwari

Ash Tiwari

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Ash is a seasoned freelance editor and writer with extensive experience in the blockchain and cryptocurrency industry. Over the course of his career, he has contributed to major publications, playing a key role in shaping informative, timely content related to decentralized finance (DeFi), cryptocurrency trends, and blockchain innovation. His ability to break down complex topics has allowed both seasoned professionals and newcomers to the industry to benefit from his work. Beyond these specific roles, Ash's writing expertise spans a wide array of content, including news updates, long-form analysis, and thought leadership pieces. He has helped multiple platforms maintain high editorial standards, ensuring that articles not only inform but also engage readers through clarity and in-depth research. His work reflects a deep understanding of the rapidly evolving blockchain ecosystem, making him a valuable contributor in a field where staying current is essential. In addition to his writing work, Ash has developed a strong skill set in managing content teams. He has led diverse groups of writers and researchers, overseeing the editorial process from topic selection, approval, editing, to final publication. His leadership ensured that content production was timely, accurate, and aligned with the strategic goals of the platforms he worked with. This has not only strengthened his expertise in content strategy but also honed his project management and team coordination skills. Ash's ability to combine technical expertise with editorial oversight is further bolstered by his knowledge of blockchain analysis tools such as Etherscan, Dune Analytics, and Santiment. These tools have provided him with the data necessary to create well-researched, insightful articles that offer deeper market perspectives. Whether it’s tracking the movement of digital assets or analyzing blockchain transactions, his analytical approach adds value to the content he produces, ensuring readers receive accurate and actionable information. In the realm of content creation, Ash is not limited to just cryptocurrency markets. He has demonstrated versatility in covering other emerging technologies, market trends, and digital transformation across various industries. His in-depth research, coupled with a sharp editorial eye, has made him a sought-after professional in the freelance writing community. From developing editorial calendars to managing content delivery schedules, he has honed a meticulous approach to project management that ensures timely, high-quality work delivery. Throughout his freelance career, Ash has consistently focused on improving audience engagement through well-researched, insightful, and relevant content. His ability to adapt to the evolving needs of clients, whether it's enhancing the visibility of digital platforms or producing thought-provoking pieces for a wide range of audiences, sets him apart as a dynamic force in the field of digital content creation. His contributions have helped to shape a well-rounded portfolio that showcases his versatility, technical expertise, and dedication to elevating the standards of journalism in blockchain and related sectors.

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