BTC Dominance Suggest Another Wave Coming For Altcoins
Historically BTC dominance has had an inverse effect on the price movements for altcoins. Meaning that BTC dominance determines the direction the value of altcoins swings in. But as we move forward, and altcoins are seeing more demand, BTC dominance goes down from being the majority dominance on the market.
BTC dominance shows how much demand there is for bitcoin compared to altcoins. Therefore, the more BTC dominance goes up, the lower the demand for altcoins. So, if altcoins were to rally up further, bitcoin demand has to go down.
BTC dominance has decreased over the years, as more and more investors put money in altcoins. One reason is that lot of investors feel they have missed the boat with bitcoin and thus are trying to get in early enough on altcoins. Others revolve around the new technological advancements being made by altcoin projects, and investors are investing into projects that they believe in.
BTC Dominance vs. Altcoins
Over the past few of months BTC dominance has continued to decline. It’s currently sitting at 48.97% dominance, meaning that Bitcoin now has less than half of the entire market dominance. This trend shows that demand for altcoins is on the rise. So, BTC dominance will continue to see declining numbers.
As BTC dominance declines, the value of altcoins will continue to go up. Market trends indicate that BTC dominance will likely drop following the latest recovery, as it will bring new steam to altcoins.
When this happens, the demand for altcoins is expected to pick up very quickly. The altcoin market will see another upward wave. Coins like Ethereum are forecasted to gain even more dominance as the project receives more interest from the investment sector. With ETH 2.0 moving the network to proof of stake and using significantly less power to mine. The reduced environmental impact will mean that mining will become less of a problem.
What Will Happen to Bitcoin
Altcoins gaining more dominance does not negate the value of bitcoin, just shows that the market is getting bigger. Currently, there are over 5,000 coins in the market all vying for market share. And some of these projects come with some very innovative ideas and tech. Thus, it is expected that as time passes, some of these projects will become popular. Therefore gaining more market share as more investors come into the market.
BTC dominance declining just means that bitcoin is not the only digital asset investors are rushing to get into. Despite decreasing dominance, bitcoin still remains the number 1 coin in the market. Being the first cryptocurrency and possibly the reason why cryptocurrencies are currently so popular.
But as altcoins rally in what is usually known as “altcoin season,” bitcoin will continue to see declining dominance. This will translate to the price of altcoins rallying massively as interest in them grows.
