Indeed, as of November 5, Bitcoin market dominance had plunged to an over four-year low of 38.67%. The digital asset last recorded a similar drop in market dominance on June 10, 2018, at 38.19%, according to CoinMarketCap data. The drop aligns with a historic premise indicating that once Bitcoin dominance drops characterized with a surging value it offers a hint of a possible altcoin season.
Implications of Bitcoin market dominance drop
Bitcoin dominance is the ratio of the asset’s market capitalisation to that of the rest of the cryptocurrency market. Over the years, the metric has emerged to have different ramifications on the entire digital asset sector. The metric usually signals potential market outcomes and influences trading decisions. Furthermore, amid a drop in Bitcoin’s price, and rising dominance, the scenario usually points to a possible altcoin bear market. However, when both Bitcoin price and dominance fall, it could signal a potential bear trend for the general crypto market. Additionally, when Bitcoin’s value and dominance rise, it’s a potential bull market indicator, while if Bitcoin’s price surges with a falling dominance, it points to a possible altcoin bull market.
Bitcoin rallies amid dropping dominance
Interestingly, this is the case for Bitcoin’s current price trajectory, having regained the $21,000 level, mainly trading in the green zone over the last 30 days. The asset is still attempting to exit the bear market despite being weighed down by the prevailing macroeconomic factors led by soaring inflation and increasing interest rates. In recent weeks, the flagship cryptocurrency has mainly traded around the $20,000 range. However, a positive United States jobs report saw the crypto rally past $21,000 to trade at $21,214 by press time.
Altcoin dominate with positive returns
In general, many altcoins have recently experienced a relief bounce as Bitcoin dominance remains below 40%. For example, data by Blockchaincenter indicates that altcoins dominate the top 50 best-performing assets. In this case, the top 14 assets with positive performance are occupied by altcoins, while Bitcoin lies in the 20th spot with -8.5% returns over the last 90 days. Overall, altcoins have seen increased attention thanks to key triggers in return, attracting a buying pressure as Bitcoin bulls appear to have a technical advantage over bears. Notably, the market has witnessed several breakout coins, although there is widespread pressure as investors remain cautious. Amid the breakout, meme cryptocurrencies are taking center stage. In particular, over the last 90 days, Dogecoin (DOGE) has registered returns of 81.7%, mainly inspired by the acquisition of Twitter Twitter’s (NYSE: TWTR) by Elon Musk. Elsewhere, as reported by Finbold, on October 30, DOGE gained by over 115% within a week. The returns have also been replicated in Shiba Inu (SHIB). Similarly, Ripple Labs’ native token, XRP, has been on the rise, mainly driven by a positive outlook in the case with the Securities Exchange Commission (SEC). The prevailing market conditions will be vital for a possible altcoin season to emerge as it will influence investor interest. At the same time, the crypto market is looking for a possible price bottom likely to spark a possible bull run. For instance, with the economy threatened by a possible recession, risky assets could potentially benefit in the event the Federal Reserve cools down on its tightening policy. Furthermore, investors will be hoping the general market builds on its ‘Uptober’ momentum to realize new gains towards the end of the year. Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
