Bitcoin dominance encounters a resistance line ─ Altcoin boom again | coindesk JAPAN | Coindesk Japan

Bitcoin (BTC) dominance (percentage of Bitcoin market capitalization in the entire cryptocurrency market) has stopped rising, suggesting that altcoins may outperform in the future.

TradingView data shows that dominance rose to 48% from 42% in the first quarter, but has struggled to surpass that level this month.

The metric has fluctuated between 38% and 48% for almost two years, and when it falls from 46-48%, it coincides with the altcoin’s massive rally.

“Bitcoin’s dominance could peak out, which would signal altcoins to outperform,” said Markus Thielen, head of research and strategy at crypto service provider Matrixport. said in a memo to clients on April 20.

When bitcoin dominance turned down from 48%, it coincided with a boom in the altcoin market. (CoinDesk/TradingView)

Looking at the chart, after BTC dominance turned downward from 48% in July 2021, the altcoin market cap surged over 60% in two months (blue arrow with white line) to $1.39 trillion. (approximately 186 trillion yen). In mid-October 2021 and June 2022, altcoin valuations rose as dominance similarly turned downward.

Thielen said history could repeat itself.

“Bitcoin dominance appears to have peaked out at levels similar to 2022, accounting for 45-46% of the total crypto market,” Thielen said. “Bitcoin’s continued dominance over other ecosystems means that only Bitcoin matters, but given the intellectual and financial power deployed in other chains, it is likely. It seems not.”

“Bitcoin used to benefit from American liquidity, but this could change in the future,” Thielen said.

｜Translation: coindesk JAPAN
｜Editing: Toshihiko Inoue
｜Image: CoinDesk/TradingView
｜Original: Bitcoin’s Dominance Rate Runs Into Familiar Resistance, Hints at ‘Altcoin Season’ Ahead