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Bitcoin Dominance Hits New Cycle High Of 58.9%, More Pain Before Altcoin Season?
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Bitcoin Dominance Hits New Cycle High Of 58.9%, More Pain Before Altcoin Season?

Ash Tiwari
Ash Tiwari
8 months ago
3 mins read
bitcoin

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As Bitcoin (BTC) inches closer to $70,000, its dominance in the wider crypto market has risen to a cycle high of 58.9%.

Bitcoin Dominance Rises, Are Altcoins In Trouble?

Bitcoin dominance (BTC.D), a metric that measures the proportion of the total cryptocurrency market cap commanded by the leading digital asset, has hit a new cycle high of 58.9%. The last time the crypto market witnessed this level of BTC.D was in April 2021.

After a slight pullback following Iran’s attack on Israel earlier this month, Bitcoin has risen by almost 10% in the past week, trading at $67,769 at the time of writing. 

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Concurrently, the total crypto market cap has surged from $2.26 trillion on October 8, to $2.41 trillion on October 16, according to data from CoinGecko. However, the rise in the total crypto market cap is largely buoyed by the upward movement in BTC price.

At the start of October, BTC.D hovered around 57.1%. Since then, it has risen by approximately 1.8%, showcasing Bitcoin’s strong performance relative to altcoins such as Ethereum (ETH), Solana (SOL), Binance Coin (BNB), and others.

The current level of BTC.D has cast doubt on the prospects for the much-anticipated “altseason,” typically characterized by parabolic price increases in altcoins and a decline in BTC.D. Notably, BTC.D peaked at 70% during the post-COVID bull market in 2020-21 before dropping to 40% by mid-2021.

In late 2022, BTC.D bottomed out at around 39% amid the collapse of FTX, which halted operations due to fraud charges against its leadership. Since then, BTC.D has been on a gradual rise, as shown in the chart below.

BTC.D
BTC.D has been on a steady rise since November 2022 | Source: BTC Dominance – CRYPTOCAP on TradingView.con

ETH/BTC Ratio Must Rebound For A Potential Altseason

As BTC.D continues to rise, it is important to consider the ETH/BTC trading pair. For the uninitiated, the ETH/BTC trading pair – colloquially known as the ETH/BTC ratio – tracks Ethereum’s (ETH) performance against BTC.

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Ethereum Gains On Bitcoin Following Fed Rate Cut: Altseason Soon?

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At press time, ETH/BTC trading pair stands at 0.0385, a level last seen in April 2021. The chart below shows that Ethereum has failed to establish a higher high against Bitcoin since at least November 2022, reflecting weak ETH price action over the past two years.

ETHBTC
ETH/BTC has been on a continual decline on the weekly chart | Source: ETHBTC on TradingView.com

A strong ETH performance against BTC often precedes an altseason, but there are no clear signs of a meaningful trend reversal.

Further, the total value locked (TVL) in decentralized finance (DeFi) protocols across all blockchains has slid from almost $110 billion in June 2024 to $88 billion, indicating weak demand for altcoins among crypto investors.

However, some crypto analysts and technical indicators still suggest a potential altseason may be on the horizon.

For example, earlier this month, the altcoin market cap surpassed its 200-day exponential moving average (EMA), a key resistance level that signals strong altcoin performance in recent days.

Similarly, Steno Research recently remarked that ETH is set for a comeback following the US Federal Reserve (Fed) interest rate cuts. BTC trades at $67,769 at press time, up 2.5% in the past 24 hours.

bitcoin
BTC trades at $67,769 on the weekly chart | Source: BTCUSDT on TradingView.com
Featured image from Unsplash, Charts from Tradingview.com
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Ash Tiwari
Ash Tiwari

Ash Tiwari

Ash is a dedicated crypto researcher and blockchain enthusiast with a passion for diving deep into the evolving world of decentralized technologies. With a background in writing and a natural curiosity for how digital assets are shaping the future, he has immersed himself in various sectors of the cryptocurrency space, including decentralized finance (DeFi), NFTs, and liquidity mining. His journey into crypto started with a desire to fully understand the technology behind it, leading him to explore and engage with these systems firsthand.

Read more

Ash’s approach to DeFi goes beyond surface-level research as he actively participates in decentralized protocols, testing their functionality to gain a deeper understanding of how they operate. From experimenting with staking mechanisms to exploring liquidity mining strategies, he is hands-on in his exploration, which allows him to provide practical, real-world insights that go far beyond theoretical knowledge. This immersive experience has helped him develop a comprehensive grasp of smart contracts, token governance, and the broader implications of decentralized platforms on the future of finance.

In the NFT space, Ash’s interest is driven by the technology’s potential to reshape ownership and creativity in the digital age. He has explored various NFT projects, gaining insights into how these digital assets function within different ecosystems. His focus is on understanding the evolving relationship between creators and communities, as well as the innovative uses of blockchain technology to establish authenticity and provenance in the digital world. Ash’s research in this area often touches on the intersection of culture, technology, and community-driven projects.

A key area of his expertise lies in liquidity mining, where he has engaged with various decentralized platforms to understand how liquidity provision contributes to the functionality and security of DeFi ecosystems. Ash’s hands-on involvement has allowed him to analyze the risks, rewards, and broader implications of liquidity pools, giving him a well-rounded perspective on this integral part of DeFi. His understanding of risk management and protocol design allows him to provide insights into how these systems can be navigated effectively, with an emphasis on both opportunity and caution.

When it comes to communicating these complex topics, Ash’s writing is grounded in clarity and depth. He excels at breaking down intricate blockchain concepts into easily digestible information for a wide audience. Whether explaining the workings of decentralized exchanges or outlining the future potential of blockchain technology, Ash ensures that his content is accessible to both those new to the space and experienced participants looking for deeper insights.

Beyond DeFi and NFTs, Ash explores a wide array of emerging blockchain applications. His research spans areas like cross-chain technologies, decentralized governance, and blockchain’s potential to integrate with traditional finance. He is continuously learning and adapting to the latest developments, ensuring that his insights are both timely and relevant. His interest extends to how these technologies are creating new possibilities for decentralization, transparency, and trust in a variety of industries.

Ash’s commitment to engaging with the crypto space firsthand gives him a unique perspective that goes beyond what can be learned from research alone. His practical involvement allows him to stay ahead of the curve, offering readers and enthusiasts a clear and comprehensive understanding of the rapidly evolving world of blockchain. Whether delving into the technical mechanics of DeFi or exploring the cultural impact of NFTs, Ash’s approach is always rooted in curiosity, research, and a desire to make this technology accessible to all.

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