BTC dominance has always had an inverse effect on the price movements for altcoins. Historically, BTC dominance determines the direction the value of altcoins swings in. Bitcoin has so far maintained majority dominance on the market. But as more time passes, that dominance goes down as altcoins see more demand.
BTC dominance simply shows how much demand there is for bitcoin compared to altcoins. The more BTC dominance rises, the lower the demand for altcoins. This means that for altcoins to rally up further, bitcoin demand has to go down.
Related Reading | Ethereum Breaks 200,000 Validators Milestone, Over $14 Billion Now Staked In ETH 2.0
Over the years, this dominance has decreased as more and more investors put money in altcoins. One reason for this being a lot of investors feel they have missed the boat with bitcoin and thus are trying to get in early enough on altcoins. Others revolve around the new technological advancements being made by altcoin projects. Hence, investors are putting money into projects that they believe in.
How Current BTC Dominance Affects Altcoins
BTC dominance has continually declined over the past couple of months. Currently sitting at 48.97% dominance, bitcoin now has less than half of the entire market dominance. This trend shows that demand for altcoins is on the rise. So, BTC dominance will continue to see declining numbers.
As the dominance declines, the value of altcoins will continue to go up. Market trends indicate that BTC dominance is poised to drop following the latest recovery.
BTC dominance currently sits at less than 50% | Source: Market Cap BTC Dominance on TradingView.com
When this happens, the demand for alts is expected to pick up very quickly. Leading to another upward wave for the altcoin market. Coins like the number 2 coin Ethereum are forecasted to gain even more dominance as the project gains more notoriety among the investment sector. With ETH 2.0 moving the network to proof of stake and using significantly less power to mine. The reduced environmental impact will mean that mining will become less of a problem.
What This Means For Bitcoin
Alts gaining more dominance does not negate the value of bitcoin. Currently, there are over 5,000 coins in the market all vying for market share. And some of these projects come with some very innovative ideas and tech. Thus, it is expected that as time passes, some of these projects will become popular. Therefore gaining more market share as more investors come into the market.
Related Reading | Fast Money’s Brian Kelly Remains Bullish On Bitcoin, Here’s Why
The declining BTS dominance just means that bitcoin is not the only digital asset investors are rushing to get into. Despite decreasing dominance, bitcoin still remains the number 1 coin in the market. Being the first cryptocurrency and the reason why cryptocurrencies are currently so popular.
But as alts rally in what is usually known as “alts season,” bitcoin will continue to see declining dominance. This will translate to the price of altcoins rallying massively as interest in them grows.
Featured image from CryptoPotato, chart from TradingView.com
by Best Owie on July 30, 2021 at 04:30AM
Comments
Post a Comment