Bitcoin (BTC) has seen its market dominance fall sharply in the past two days as the latter crypto rally skewed more toward altcoins. A mix of institutional buying and interest in staking seemed to have triggered the rally.
BTC’s market dominance stood at 40.9% on Saturday, falling sharply from the 42% observed on Thursday. While the token is trading up 5% this week, it has been vastly outpaced by smaller coins this week.
Still, BTC was the culmination of a crypto rally in March. Market sentiment was boosted as the world’s largest token jumped to its highest level since December, hitting $48,000.
crypto commentator @scottmelker noticed the drop
Altcoins fly past BTC
Ethereum (ETH), Solana (SOL), Terra (LUNA) and Avalance (AVAX) performed very well in the past seven days, rising 11% to 38%. While ETH gains were at the low end of this range, the imminent shift to a proof-of-stake (PoS) model has been credited with boosting interest in several other altcoins.
Increased institutional interest – a key factor in BTC’s 2021 rally, also seemed to help altcoins. Fund managers such as Coinshares and Grayscale have recently included SOL, ARD and other altcoins in new products aimed at professional investors.
PoS token SOL led gains this week among its peers, also surpassing $40 billion in market cap and becoming the sixth largest cryptocurrency.
LUNA jumped 25% to a record high of $112 as large BTC purchases by the community, coupled with a steady burn rate, propped up the token. The LUNA community has bought BTC to use as a reserve for its stablecoin, TerraUSD, as part of an aggressive effort to make it the largest stablecoin.
Broad rallies tend to dent BTC dominance
The lowest ever BTC dominance was around 37%, observed in 2017 during the initial launch of several altcoins. While the token’s dominance has since sharply recovered to over 70%, the massive rally in 2021 saw BTC’s weight return to around 42%, where it has hovered ever since.
The token’s dominance tends to decline when the market sees an extended rally, with the latest bull run showing similar results. Whether this trend will continue remains to be seen.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or the publication is not responsible for your personal financial loss.
About the author
With over five years of experience in global financial markets, Ambar plans to leverage this knowledge for the fast-growing world of crypto and DeFi. His main interest lies in finding out how geopolitical developments could affect crypto markets and what that could mean for your bitcoin holdings. When he’s not scouring the internet for the latest news, you can play him video games or watch Seinfeld reruns. You can reach him at [email protected]
This post Bitcoin (BTC) Dominance Retreats As Altcoins Rally, Another Dip?
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