The recent increase in the price of Bitcoin has happened largely at the expense of smaller digital assets, as many altcoins have reported significantly lower performance than BTC, as investors increasingly seek to find assets that can perform well. given the current global economic situation.
Some major cryptocurrencies even trade at price levels not seen since 2014 while looking at their BTC trading pairs.
This in turn resulted in the dominance of Bitcoin over crypto market recently lately. One analyst notes that it may need to be reduced by 8 percent for altcoins to start gaining upward momentum.
Altcoins lag far behind Bitcoin as traders flock to liquidity
The ongoing economic crises observed around the world have forced investors in all markets to focus on quality and liquidity.
In the case of crypto markets, this has led to an exodus away from altcoins and an accumulation towards Bitcoin.
Many major cryptocurrencies – including Ethereum and XRP – have performed much weaker than the flagship digital asset in the last few weeks. This trend is clarified by looking at Bitcoin’s dominance over the market, which is currently 67.4%. This marked a significant rise from mid-February levels of just under 60 percent, which occurred at the top of the market.
Since then, this trend has reversed, and Bitcoin is now the most dominant crypto market since 2019.
A pseudonymous Twitter trader called Pentoshi has been talking about the poor performance of altcoins seen against BTC recently, noting that many are trading at levels not seen since 2014.
“ETH is targeting levels not seen since 2016. LTC trading is below 2014-2016 prices. XRP is targeting levels of 2014, 2016 and 2017. The altcoin market appears likely to capitulate soon. “
Here’s how BTC dominance needs to decline to see an altcoin rally
Josh Rager, another respected cryptocurrency analyst on Twitter, explained that he believes Bitcoin dominance should fall to 60 percent before altcoins can go up.
“The dominance of BTC has remained between 62% and 72% since June 2019. Before the next altcoin rally, it would like to see a sharp downward movement to 60%. But if Bitcoin can reach more than $ 10,500, it will likely lead to an influx of money into BTC, leading to an increase in dominance.
Whether investors continue to treat Bitcoin as a secure asset, they could also play a role where its dominance over market trends, as this could perpetuate the continuing exit away from altcoins.