Bitcoin’s market cap dominance is holding above 45% for the first time since October 2021.
The top crypto’s dominance over the market has surged since Terra’s implosion last week.
Bitcoin has historically dominated the market during bear cycles.
Share this article
Bitcoin has historically dominated the cryptocurrency market during downturns.
Bitcoin Dominance Rallies
Although the crypto market looks weak, Bitcoin is proving that it’s still “the King.”
The number one cryptocurrency has seen its market cap dominance soar this week, rising to 45.27% Thursday. Bitcoin’s dominance over the market last topped 45% in October 2021, weeks before it hit an all-time high above $69,000.
Market cap dominance refers to the proportion of the market one asset represents. Bitcoin has historically been dominant during bear cycles, but it tends to make way for other assets such as Ethereum in bullish market conditions. Bitcoin’s dominance topped 70% shortly after it broke $20,000 for the first time in December 2020, but then faced a bleed throughout much of 2021 as other assets soared. Bitcoin’s dominance has been increasing throughout this year and has rallied over the past week.
The crypto market has had a shaky month so far, with the global market cap plummeting from around $1.8 trillion to $1.3 trillion. Amid the volatility, Bitcoin’s performance has been weak. The number one crypto posted its eighth consecutive weekly close in the red this week, an unprecedented drop-off even by crypto standards. Per data from TradingView, it’s currently trading at around $29,800, falling short of the crucial psychological level above $30,000.
Although Bitcoin has had a rough spell over recent months, true to bear market form, many other lower cap assets have fared much worse, which explains why its dominance is soaring. Many of the so-called “alternative Layer 1” networks that boomed in late 2021 have suffered huge losses amid the slump. Solana, for example, is 80.1% short of its all-time high, trading at around $52.23. Avalanche, another relative newcomer in the smart contract space, saw huge gains late last year, but has also declined in recent weeks. It’s 79.3% short of its peak, trading at about $30.16. Terra, one of the strongest performers of 2021, has also been wiped out following its devastating death spiral last week.
Interestingly, Bitcoin’s dominance increased as Terra started to collapse. The market was shaken by volatility over the course of the week, briefly causing USDT to lose its peg and panic-induced sell-offs across the board. While Bitcoin was shaken during the events, it’s held up relatively well against other assets.
Bitcoin’s market cap is currently around $567.9 billion. Now in its seventh month of downward price action, it’s about 57% shy of its all-time high.
Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.
Share this article
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.