Bitcoin (BTC)'s market dominance has soared to 64%, reaching a 4-year high.
However, experts have differing opinions on what this means for the future. Some predict the altcoin era is imminent, while others warn that Bitcoin's dominance could continue to suppress altcoins.
What does the rise in Bitcoin's dominance mean?
Bitcoin dominance (BTC.D) represents Bitcoin's percentage of the total cryptocurrency market capitalization. It is a key indicator of Bitcoin's market strength compared to other cryptocurrencies. An increase in dominance means Bitcoin is outperforming altcoins, while a decrease could indicate growing interest or investment in other digital assets.
This indicator has been steadily rising since the end of 2022. Based on the latest data, it has soared to 64%, last reaching its peak in early 2021.
Notably, Benjamin Cowen, founder of Into The Cryptoverse, showed that the figure is much higher when excluding stablecoins.
Cowen stated, "Excluding stablecoins, Bitcoin's market share is currently at 69%."
The rise in Bitcoin's market share has sparked debate among analysts about its impact on altcoins. Cowen anticipates a correction or decline before expecting significant growth in the altcoin market, suggesting that the altcoin season may not be imminent.
He said, "I think the alt/Bitcoin pair needs to go down before it goes up."
Nordin, founder of Noor Group, also took a cautious stance, emphasizing that Bitcoin's dominance is approaching levels seen at the peak of the 2020 bear market.
"This is not just Bitcoin's movement. Capital is circulating from altcoins," he pointed out.
Nordin also warned that breaking 66% could intensify selling pressure on altcoins, potentially delaying the altcoin season.
Analyst Alessandro Ottaviani predicted, "Bitcoin's dominance has recovered to 64%. There might be no alt season in 2024 or 2025."
Meanwhile, analyst Mr. Crypto predicted that Bitcoin's dominance could follow a descending triangle pattern, typically indicating a bearish momentum as lower highs form.
However, this could mean altcoins might gain traction over the long term with a larger correction.
Another analyst mentioned that Bitcoin's dominance is currently testing a resistance zone between 64% and 64.3%, suggesting a potential pullback. Such a pullback could draw attention to altcoins, with some potentially emerging as top performers as capital moves away from Bitcoin.
"However, breaking this zone could mean further decline for altcoins," the analyst noted.
Lastly, Junaid Dar, CEO of Bitword Invest, offered a more optimistic view. According to his analysis, Bitcoin's dominance falling below 63.45% could trigger a strong altcoin rally, presenting an ideal opportunity to profit from altcoin positions.
"Currently, altcoins are at a standstill. It's just a matter of time," Dar added.
Tether's Dominance Signaling Potential Altcoin Season
Meanwhile, many analysts believe the Tether dominance (USDT.D) trend signals a potential altcoin season. From a technical analysis perspective, USDT.D has reached a resistance area and may see a correction, suggesting potential capital inflow from USDT to altcoins.
A technical analyst stated, "USDT will be favorable unless it closes above 6.75%. USDT is in a rejection area."
Another analyst also emphasized that USDT.D and USD Coin dominance (USDC.D) have reached resistance levels, predicting an upcoming altcoin season. Dogu Tekinoglu drew similar conclusions by observing the integrated chart of BTC.D, USDT.D, and USDC.D.
As Bitcoin's dominance increases, investors are closely monitoring these technical and on-chain signals. Depending on Bitcoin's strength and the interaction with stablecoin dynamics, altcoins may either rebound or consolidate this summer. Currently, Bitcoin's market dominance remains firm.
