Bitcoin’s share in crypto market capitalization has risen to 59%
While the bitcoin exchange rate is rising, altcoins show consolidation or decline
16.10.2024 - 10:30
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What’s new? Bitcoin’s share of the total crypto market capitalization has reached the highest level since April 2021 — 58,77% or $1,32 trillion. The exchange rate of the asset itself added 2,5% on October 15 and reached a 10-week high of $67 800, while the altcoin market is in a lull, either trading in a narrow price range or getting cheaper.
What else is known? The ratio of the BTC capitalization to the entire crypto market is also known as bitcoin dominance. Traders often use this indicator to assess market trends and direction.
BTC dominance usually increases in bear markets as traders seek to reduce risk and eliminate more volatile altcoins.
Crypto analyst, founder and head of Into The Cryptoverse Benjamin Cowen believes that bitcoin’s share will continue to grow and reach 60%. He believes this is an important indicator because, during its growth, users can allocate their assets to BTC, giving it the largest share of their portfolio, and still earn returns that outperform most altcoins in the broader crypto market.
For his part, a trader and investment advisor under the nickname Coach K Crypto believes that bitcoin’s dominance has peaked in the current cycle. In his opinion, the indicator will soon collapse, and the largest altcoins and meme tokens will come to the fore.
For example, historically in a bull market, investors take profits from bitcoins purchased during the previous bear market and direct them to altcoins, NFT projects, and other risky assets in the hope of generating greater returns. As a result, BTC’s dominance is waning.
Entrepreneur, engineer and Forbes 40 Under 40 list blogger Moataz Elsayed, known as Eljaboom, also believes that bitcoin’s dominance will show a sharp decline, followed by the so-called altcoin season, during which many of them will update their price highs.
Historically, Ethereum is one of the first to start rising when bitcoin dominance declines. However, the ETH/BTC exchange rate is currently near its lowest since April 2021: it fell below 0,039 this week, according to TradingView.
Since bitcoin hit an all-time high of $73 738 in March, it has traded mostly sideways. The asset is now approaching a key psychological level — the previous high set in November 2021 at $69 000.
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