Altcoins like Ethereum, Litecoin, and XRP have struggled to recapture lost market share from Bitcoin in 2019. This has been reflected by a sharp increase in Bitcoin dominance – a metric that has increased steadily throughout the year.
But as Bitcoin dominance begins to break down from recent highs, altcoins have begun to show signs of life once again, and some crypto analysts believe that a recovery may be ahead for altcoins now that Bitcoin has started to correct in a big way.
Altcoins Gain Against Bitcoin as BTC Dominance Dwindles
All this year, Bitcoin’s parabolic rally has been like a vacuum for altcoins, sucking out whatever remaining value they have left after falling as much as 99% in some cases to their bear market lows.
Related Reading | Ethereum, XRP, Litecoin and Other Large Cap Alts Poised For 20% Breakout
As Bitcoin climbed higher and higher, both the USD value and the BTC ratio in altcoins began to fall. But now that Bitcoin’s bullish rally has come to an end, Bitcoin dominance – a metric used to weigh Bitcoin’s market cap against the rest of the alts in the space – has also started falling, and it could open the flood gates for altcoins to rally.
BTC dominance reached a peak of over 70% in early September and has been steadily declining since. This week, Bitcoin dominance fell to under 67% and appears to be ready to plummet lower, especially if altcoins continue to rally.
$BTC dominance breaking down. Continuing to look like it's dropping more and more. pic.twitter.com/lmhEuvA5wZ
— IncomeSharks (@IncomeSharks) October 7, 2019
The drop in BTC dominance coincides with a rise in the value of many of the top altcoins. According to altcoin charts, the asset class appears to be bottoming – especially when it comes to “major” alts such as Ethereum, XRP, or as one crypto analyst points out, Tron or IOTA.
On the day, Tron, EOS, and Chainlink are all up 9% or more, while XRP trails right behind with 7% growth over the last 24 hours. These alternative crypto assets have all gained against the leading crypto by market cap, with their BTC ratios also being up as much as 6% on the day.
So many alts (especially the majors) printing the same structure.
It's that time of the year where we toss a coin to choose a position? $TRX / $ETH / $XRP / $IOTA pic.twitter.com/ao5hmtCjjb— The Crypto Monk (@thecryptomonk) October 6, 2019
Given that altcoins have been stuck in a downtrend for nearly the entire last two years, selling pressure is starting to dry up, and the low liquidity markets of each altcoin are ripe and waiting for a whale to come in and start making waves once again.
Related Reading | Crypto Analyst: Altcoin Apocalypse Caused Bitcoin Bear Market
With Bitcoin price trading sideways, altcoins often shine. Could the current Bitcoin price action and fall in dominance lead to a true alt season as the crypto community has been clamoring for? Or is this yet another altcoin bounce, and soon Bitcoin dominance will set a new high in the coming days?
Featured image from Shutterstock