Crumbling Bitcoin Dominance: There Are Better Days Ahead For Altcoins

For the past few months, I've been keeping an eye on the Bitcoin dominance on the CoinMarketCap and, interestingly, the trends of the past few weeks are worth writing about. Clearly, the Bitcoin dominance is collapsing gradually but noticeably - with significant implications for the altcoin market.

For those who are new to cryptos and do not really know what the Bitcoin dominance is and its implications on the crypto market, permit me to swiftly make some explanations. The Bitcoin dominance generally refers to the percentage which the market cap of Bitcoin (being the king of cryptos) represents in the total market cap of all known cryptos.

Over the years, a rising Bitcoin dominance has correlated with a bearish trend for altcoins and vice versa. The reason being that a rising Bitcoin dominance usually suggests that the market sentiments is more favourable to Bitcoin than it is to altcoins. But the reverse becomes the case as the Bitcoin dominance starts declining. The implication is that money is flowing out of Bitcoin into altcoins, which has been the case within the past few days.

Specifically, Bitcoin has lost over 3% in its market capitalization over the past three weeks. From a high of 68% a few months back, the Bitcoin dominance is now below 65%. As expected, the results have been wonderful for several altcoins, especially the ones with a relatively smaller market capitalization. Even STEEM was not left out as it has gained over 80% within this period. Similarly, altcoins such as ETH, EOS, BNB, LTC, etc have also rallied as the Bitcoin dominance continues to fall.

To say the truth, it is really strange that the Bitcoin dominance is crumbling when the next halving event is scheduled to happen in few months time. One would have expected some more massive accumulation, like folks buying the rumour and selling the news, before the halving event. If that was already happening, it was natural that the Bitcoin dominance would go up or at least remain static.

Surprisingly, the Bitcoin dominance is falling instead. This clearly means that either Bitcoin was being sold to buy altcoins or massive money was flowing into altcoins than Bitcoin was recently receiving. The summary is that the market sentiments are now in favour of altcoins ahead of the forthcoming halving event.

Consequently, this writer is predicting that the altcoin market will see more gains in the coming weeks and may continue on that run until the halving events occur. By then, the price of Bitcoin could have gone much lower than anticipated. This will create a buy signal that could change the sentiment in favour of Bitcoin, paving way for it to set a new all-time high.

But I do not see the present blossoming altcoin market brewing into an altseason because Bitcoin is yet to reach a new all-time high. However, altcoins are making some awareness again but only time will tell exactly what direction it will head in the coming days.