Bitcoin's dominance climbs to 42% of the crypto market

in bitcoin •  19 days ago

Bitcoin's dominance has been well down from previous levels, but over the past few months it has started climbing again.

Ever since Bitcoin peaked in December of 2017, it's total percentage of the crypto market cap has been falling.

It peaked around 65% in December and then bottomed around 32% in January when altcoins went on their bullish surge.

That 65% may sound like a high number but when you zoom out and look at bitcoin's entire history, it actually consistently traded with more than a 80% market dominance for many years:

(Source: https://coinmarketcap.com/charts/#dominance-percentage)

Though, as you can see, the chart did seem to be sloping down ever so slightly from left to right.

Why this climb now is interesting to me.

This climb we are seeing currently is interesting because a few months back Goldman Sachs put out a note that said Bitcoin's dominance tends to decline in bear markets and increase in bull markets.

The conclusion was something along the lines of this:

Usually, when the dominance index of bitcoin is low, the market is in a bear cycle and when the dominance index of bitcoin is high, the market enters a bull market.

Go figure, right?

Given the current rise in the bitcoin dominance indicator, does that mean that we are on the verge of another bull market?

(Source: https://coinmarketcap.com/charts/#dominance-percentage)

While it is not clear whether this is a leading indicator or not, that chart above does look like it is about to make a move back to a higher dominance level for bitcoin.

This would also jive with the fact that over 800 coins are now considered "dead".

Meaning they trade for less than a penny, and/or the development team has abandoned the project, and/or the project has been deemed a scam, according to deadcoins.com.

https://www.cnbc.com/2018/07/02/over-800-cryptocurrencies-are-now-dead-as-bitcoin-feels-pressure.html

This is probably a good thing, as strange as that sounds, as there needs to be some major house cleaning in terms of valuations in the crypto space.

Once this house cleaning is done, the legitimate projects will collect the lion's share of investment dollars, very similar to what happened in the dotcom bubble days.

As the house cleaning continues I think existing legitimate projects, like bitcoin, as well as many other coins in the top 50 or so will continue to attract investing dollars as many of the others continue to die away.

Luckily for us, it looks like steem can be included in that first list.

Stay informed my friends.

Image Source:

https://coinmarketcap.com/

Follow me: @jrcornel

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Just as it happened last year, when the bull comes Bitcoin might claim an even larger percentage

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I am thinking so as well.

The question I have is, when bitcoin eventually runs, will it pull from altcoin prices or will they all go up together? I have seen both happen before.

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Nobody can know this for sure.

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What is your gut feeling?

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Gut feeling is very subjective, so I don't see how it may benefit you knowing mine.

I think that we will see a pull from altcoin prices. After all, it's Bitcoin who's getting most of the attention and, more importantly, institutional instruments.

I also think that some of the altcoins are going to separate themselves from the herd. Just the ones that solve a real-world problem, though.

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It doesn't really benefit me, just was a bit curious.

I believe the past year, the focus on BTC in the mainstream financial and news outlets and the ‘tulip bulb’ mania of Oct-Dec 2017 served a very useful purpose.

  1. People began to understand that the term ‘cryptocurrency’ was very nuanced - i.e. that ETH and STEEM for example derived their respective values very differently than e.g. BTC, LTC, DSH,BCH -
  2. Although technical trading drove the volatility and market swings, many people began looking at these ‘ALT-Coins’ differently and some began investing based on project fundamentals rather than 50-day MA, Fibonacci lines, etc - investors vs traders -
  3. Those perspectives are now discussed on more social media outlets and mainstream business media outlets raising levels of awareness and interest.

There are many other reasons to be positive but the Age of Blockchain has definitely arrived. The genie is out of the bottle and there will be no turning back. The escalating market capitalization is just beginning - the future is bright indeed.

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Great comment. I couldn't agree more.

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Basically the laymans caught up to speed with seasoned crypto guys.

The storm is coming

in a good way

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I think we are still going to see a FOMO rally by end of this year.

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I've been talking to my friends about Bitcoin ever since I got in about half a year ago. I started before the rally from 8k.

Two of them, who were initially very sceptical about buying anything are now seriously thinking about getting some BTC. This just prooves there are people out there who are coming in every day.

@jcornel
This are signs of bull run approaching

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My thoughts as well. I am thinking we will see another FOMO rally at some point before this year ends. I think it will mostly be started by institutional money coming in.

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While there have not been jumps up in price on any significant volume, it is also same for the opposite. The sellers are becoming very weak indeed. History of bitcoin says both ways are possible. There has been a correction much longer than this last one, but there have also been short ones.

THAT IS A GOOD NEWS IN THE MARKET OF COINS, THAT BENEFITS THE USERS, THAT THEY CONTINUE RISING MORE

Interesting. What is the chance for the bitcoin go up to 50k? :)

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This year, or ever?

Bitcoin should remain dominant. The tech is better and more mature than the competitors.

the crypto king is back to its dominance level time to buy alts with caution as if btc moves down too much there will be bloodbath everywhere in crypto price

@jrcornel will bitcoin rich its all time high ? According to you what will be the expected price if the bull run comes?