Bitcoin Dominance Signals a Long-Term Shift
Bitcoin’s dominance over the entire market has continued to increase steadily over the past few weeks, even as many Bitcoin and many other cryptocurrencies started the week on a negative note. According to data from CoinMarketCap, Bitcoin’s dominance is now at 60.4%, its highest level since the 2021 bull market.
This increasing Bitcoin dominance has intensified talks as to whether an altcoin season is imminent or indefinitely paused. According to popular crypto analyst Benjamin Cowen, Bitcoin’s dominance might continue for now until the current trend of new meme coin launches comes to an end.
Bitcoin Dominance Signals a Long-Term Shift
According to crypto analyst Benjamin Cowen, the reality is that altcoins have been steadily losing value against Bitcoin since 2021, despite occasional short-lived rallies. His perspective, based on the OTHERS/BTC chart, suggests that investors anticipating an explosive altcoin resurgence may need to wait longer.
Bitcoin’s increasing dominance over the broader cryptocurrency market has raised questions about when the Bitcoin gains will eventually roll over into the alt market like in the previous bull cycles. Cowen highlights that the OTHERS/BTC ratio, which measures the market capitalization of all cryptocurrencies outside the top ten against Bitcoin, has been in a continuous downtrend for nearly three years.
Will Altcoins Recover? The Key Market Indicators To Watch
The steady decline of OTHERS/BTC shows how capital is consistently flowing away from altcoins, reinforcing Bitcoin’s strength as the dominant crypto, especially among institutional investors. However, many alt advocates continue to anticipate a resurgence.
On the other hand, Cowen noted quantitative tightening (QT) as the key historical factor that determines when the altcoin season will eventually roll into action. During the previous bull market, the end of quantitative tightening marked a turning point for alts, allowing them to regain momentum against Bitcoin. However, since QT remains in effect, he argues that the conditions necessary for an altcoin comeback have not yet materialized. As such, the alt season may be paused indefinitely.
Conclusion
In conclusion, Bitcoin’s dominance over the cryptocurrency market has reached a new high, with many analysts predicting that this trend may continue for the foreseeable future. While some investors may be waiting for an altcoin resurgence, the data suggests that altcoins have been steadily losing value against Bitcoin since 2021. The key market indicators to watch for a potential altcoin recovery include the end of quantitative tightening and a shift in investor sentiment.
FAQs
Q: What is the current level of Bitcoin’s dominance?
A: According to data from CoinMarketCap, Bitcoin’s dominance is currently at 60.4%, its highest level since the 2021 bull market.
Q: What is the OTHERS/BTC ratio?
A: The OTHERS/BTC ratio measures the market capitalization of all cryptocurrencies outside the top ten against Bitcoin.
Q: What is quantitative tightening (QT)?
A: Quantitative tightening is a monetary policy tool used by central banks to reduce the amount of money in circulation. In the context of cryptocurrency, QT refers to the reduction of new tokens being issued, which can impact the overall market capitalization of altcoins.
Q: Will altcoins recover?
A: According to Benjamin Cowen, the conditions necessary for an altcoin comeback have not yet materialized, and the alt season may be paused indefinitely. However, some investors continue to anticipate a resurgence.
