- Bitcoin price has been on a tear since the start of 2023.
- The recent uptick in BTC dominance has pushed it to two-year highs at 51.03%.
- Altcoins might have to take a backseat until the big crypto takes a breather.
Bitcoin price has increased 74% in the last six months, and recent developments suggest more gains are on the way. Specifically, the BTC dominance shows a bullish outlook while the short-term picture remains optimistic.
Also read: WisdomTree joins traditional finance's BTC race for Bitcoin ETF approval
What is Bitcoin dominance and why is it important?
Bitcoin dominance is the market capitalization or percentage of BTC as compared to the total market capitalization of the cryptocurrency industry. A spike in this index suggests that more investors are willing to invest in BTC as opposed to altcoins like Ethereum (ETH) or Ripple (XRP), among others.
As seen in the chart below, Bitcoin dominance has been on an uptrend since November 2022 and recently shattered through the 50% level, retesting two-year highs. These levels were last seen in April 2021, marking a shift in narrative among investors.
Bitcoin Dominance 1-week chart
The increase in Bitcoin dominance suggests that the interest has moved from risky altcoins to BTC, which is perceived as relatively safer. More often than not, this move is seen during the start of a new cycle or a bull run.
Considering the uncertainty over global macroeconomic conditions and crypto’s regulatory landscape in the US, it is likely that long-term investors are buying the dip.
Also read: Recent Bitcoin price crash triggers whales to scoop BTC at discount
What this means for altcoins?
A spike in Bitcoin dominance could mean two things: fresh capital is flowing into BTC or the unrealized profits from altcoins are moving back to Bitcoin. Therefore, an extrapolation from these conditions could mean that investors are selling their altcoins and moving capital back to Bitcoin.
These conditions could propel BTC higher while Ethereum (ETH), Ripple (XRP), Litecoin (LTC) and other altcoins could move sideways or slide lower.
While Bitcoin dominance has risen 18% since February, altcoin dominance has shed nearly 27%. This negative correlation is likely to bode ill for altcoins in the near future.
Bitcoin Dominance vs. others chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Turn off Solana and win $400,000 - Solana Foundation executive announces offer
Solana has been touted as an Ethereum killer, but as with every blockchain in the crypto market, the network does not come without its fair share of issues. While many who get hacked or exploited deal with the issues after the fact, Solana intends to get a step ahead by making a very lucrative offer to white hat hackers.
Grayscale vs. SEC deadline: Commission faces a midnight Friday deadline to challenge August 29 loss
Grayscale Investments secured a resounding victory in its longstanding case against the US Securities and Exchange Commission in late August. The lawsuit started in October after the firm approached the D.C. Circuit Court pushing to have its Bitcoin Trust converted to an Exchange-traded fund.
Loom Network price hits strong weekly resistance after 32% surge as LOOM ranks high on Korea’s Upbit
Loom Network token is highly bullish, passing as a rather lucrative investment for scalping traders, buying and selling the asset within a short period to make small profits.
Voyager founder charged by CFTC for fraud and by FTC for misleading investors that lost $1 billion
Voyager was among the first crypto companies to collapse and file for bankruptcy in 2022. While the platform has been making efforts to return its customers' assets since then, it looks like the regulatory bodies are not willing to be patient.
Bitcoin: Can BTC bears challenge crypto’s 2023 bull rally?
Bitcoin (BTC) price is at a critical juncture in the weekly time frame, where bulls and bears are battling for control. However, a multi-time-frame analysis shows that BTC is bullish daily and is likely to rally higher.