Bitcoin’s recent price surge, pushing past the critical $90,000 level, has captured the attention of both seasoned investors and new market participants. For the first time in six weeks, Bitcoin has broken through the psychological barrier of $90K, an important milestone for the crypto market. In this blog, we’ll delve into Bitcoin’s dominance in the market, what the future may hold for BTC, and how its performance impacts the broader cryptocurrency space, including altcoins like Ethereum, XRP, and others.
Before you dive in, check out our latest guide on 13 ways how to earn crypto
Bitcoin Price Breaks Above $90K
Bitcoin’s price has been on an upward trajectory, gaining momentum over the past few weeks. The cryptocurrency has now surpassed $90,000, a price point not seen since early March. This marks a significant technical and psychological achievement for BTC, as $90,000 was previously viewed as a major resistance level. In the past 24 hours, Bitcoin has surged by 3.3%, bringing its weekly gains to 7.3%. This price increase signals a potential new rally, as the market sentiment turns increasingly bullish.
At the time of writing, Bitcoin’s market dominance stands at an impressive 61.6%. This figure is steadily climbing, indicating that Bitcoin continues to outperform the rest of the market, including altcoins. As Bitcoin prices rise, so does its dominance, signaling that Bitcoin is driving the current market rally.
The CME gap we discussed last week is sitting at 92.8k and 93.8k. Watch out for a sweep of that in case you’re considering a cheeky short here.
Learn more about CME gaps with our guide.
BTC Dominance at Resistance: What Does This Mean?
Despite Bitcoin’s recent success, BTC dominance is now facing a critical resistance level. Bitcoin’s dominance in the crypto market is inching closer to a long-term trendline that has historically signaled reversals in the market. On the weekly BTC.D candlestick chart, this descending resistance has halted Bitcoin’s dominance several times in the past. Now that Bitcoin’s dominance is once again nearing this trendline, some technical analysts are predicting that BTC dominance could face a sharp decline, potentially dropping to 40%.
A crash in Bitcoin dominance to 40% would be a significant shift in the market dynamics. It would signal that Bitcoin is losing its market share, and altcoins are gaining traction. For traders and investors, this could pave the way for an altcoin rally, often referred to as “altseason.” Which would be good for the bigger caps like Solana, Ethereum, XRP or even memecoins.
However, if we break this resistance, then 72-73% BTC-D is next.
Why a Drop in BTC Dominance Could Be Positive for Altcoins
Bitcoin dominance has been steadily increasing throughout this market cycle. However, some analysts believe that a decline in BTC dominance could actually be beneficial for altcoins. If Bitcoin’s dominance falls, altcoins like Ethereum, XRP, Solana, and others could experience a resurgence in value. Historically, when Bitcoin’s dominance drops, it signals that altcoins are outperforming Bitcoin, leading to price increases in these smaller, more volatile assets.
This trend is expected to bring attention to several key altcoins that have weathered multiple market cycles. Tokens like Ethereum, XRP, Cardano, BNB, and Litecoin are likely to see renewed interest from retail traders. These “DINO” coins (coins that have survived multiple market cycles) are often the first to benefit when Bitcoin’s dominance wanes.
However, the current crypto market is far more saturated than it was in previous cycles. With thousands of altcoins now available, the selection process will be much more rigorous. Sectors like Artificial Intelligence (AI), Real World Assets (RWA), and DeFi are expected to draw significant attention. But even within these categories, only a select few altcoins will rise to the top.
Can Bitcoin Dominance Really Drop to 40%?
While the idea of Bitcoin dominance crashing to 40% is not a new one, it remains a hotly debated topic in the crypto community. We’ve seen similar drops in BTC dominance during the 2017 and 2021 bull markets, but many wonder if this trend will continue in today’s market. Bitcoin has gained significant institutional support, especially through the introduction of Spot Bitcoin ETFs. These funds have helped solidify Bitcoin’s position in the market, but they also lock up Bitcoin for the long term, which may reduce the likelihood of a sharp drop in dominance.
If BTC dominance does drop to 40%, it could trigger a new altcoin season, similar to previous market cycles. However, it’s important to note that not all altcoins will survive the ensuing volatility. History has shown that many altcoins experience brutal drawdowns, losing over 90% of their value once the bullish sentiment fades and capital flows back into Bitcoin or stablecoins.
Final Thoughts
Bitcoin’s surge to over $90,000 is an exciting development for the crypto market, but the rise in BTC dominance is also an important factor to watch. As Bitcoin nears a critical resistance level, there is a chance that its dominance could decline, paving the way for altcoins to rise in prominence. If Bitcoin dominance does crash, altcoins like Ethereum, XRP, and others are likely to experience significant price increases, but not all altcoins will benefit. It’s essential for investors to remain selective and focus on the strongest projects that are positioned to thrive in a changing market landscape.
In the coming weeks and months, it will be fascinating to see how Bitcoin’s dominance and price movements shape the direction of the broader cryptocurrency market. Whether you’re a Bitcoin enthusiast or an altcoin fan, this is an exciting time to watch how the market evolves.
If you enjoyed this blog, check out our recent update on Gold vs Bitcoin and trading tokenized Gold.
As always, don’t forget to claim your bonus below on Bybit. See you next time!
