Crypto Market Dominance: Bitcoin Reigns as Altcoins Face Tough Times

Crypto Market Dominance: Bitcoin Reigns as Altcoins Face Tough Times

Crypto News – At present, the cryptocurrency market is predominantly influenced by Bitcoin, often referred to as the ‘big brother’ of the crypto world. Bitcoin, the pioneer of cryptocurrencies, has achieved its highest market dominance this year, while most other digital assets are caught in a bear market with waning enthusiasm.

Historically, Bitcoin has been a trailblazer in major market cycles, with alternative cryptocurrencies, known as altcoins, trailing behind. This trend is particularly evident in the current cycle, where the majority of altcoins still find themselves down by a staggering 80-90% from their previous all-time highs.

Bitcoin’s Dominance Surpasses 50%

Bitcoin’s dominance in the cryptocurrency market reached its peak in 2023, standing at 52.17%, as reported by TradingView. Although it briefly surpassed the 50% mark in late June, it dipped to 49% in August.

To put this in perspective, at the beginning of the year, Bitcoin held just 42% of the market share. Its dominance has steadily increased throughout the year, indicating a clear upward trend. Notably, Bitcoin’s dominance dropped below 40% in late November following the FTX exchange collapse. The last time it reached levels higher than its current dominance was in early April 2021, which was approximately six months before the peak of the previous bull market.

This trend is expected to continue as the Bitcoin halving event approaches, drawing liquidity and attention to the king of cryptocurrencies. However, some analysts anticipate a final market shakeout before this bullish trend fully materializes.

Altcoins Bear the Brunt

This increase in Bitcoin’s dominance has come at the expense of altcoins, whose market capitalization remains at around $1.1 trillion. Ethereum, one of the leading altcoins, has seen its value drop to a seven-month low, and the rest of the altcoin market follows suit.

On October 19, Michaël van de Poppe, CEO of MN Trading, noted that altcoins are in the latter stages of the ongoing bear cycle. He emphasized that sentiment has eroded, and the pain in the altcoin market is palpable. This current bear market for altcoins has been notably protracted.

Many altcoins reached their peak in May 2021, about six months prior to Bitcoin and the broader cryptocurrency market. Therefore, it’s not surprising that they are still trailing behind ‘big brother’ Bitcoin following a 29-month bear market.

A Glimmer of Hope?

Crypto analyst “Moustache” pointed out a potential breakout from a two-and-a-half-year falling wedge in the total market capitalization, excluding Bitcoin. This suggests that the outlook for altcoins might be more positive than it appears.

Crypto Market Outlook

In the short term, the cryptocurrency market outlook remains rather pessimistic, especially for altcoins. The total market capitalization has experienced a 1.1% drop in a day, with a sea of red engulfing the altcoin space.

Bitcoin, on the other hand, continues to trade above a significant support level at $28,310 and has seen a 5.4% increase in the past week. However, Ethereum’s price has fallen once more to $1,552, Binance’s native token, BNB, has experienced a 1.5% decline to $210, and XRP is down by 1.8% to $0.481.

Altcoins like Polygon, Litecoin, Shiba Inu, and Avalanche have suffered more significant losses.

The prevailing narrative in the cryptocurrency market points to a Bitcoin-dominant landscape, with altcoins struggling to regain their previous highs. Despite the bleak short-term outlook, some observers are cautiously optimistic that a turning point might be on the horizon, potentially altering the fate of altcoins.