Bitcoin dominance remains high as market sell-off resolves

Bitcoin’s dominance in the market remains undiminished even as the price falls below $30,000. Just as BTC took a hit, so did altcoins. This gives the pioneer cryptocurrency more leeway to regain market dominance. While the market has been brutal for investors over the past week, it is starting to level off and indicators are starting to point to better forecasts as the end of the month approaches.

Bitcoin remains high

For Bitcoin, its dominance in the crypto space has never been disputed. However, this dominance has been declining as more digital assets become more popular. Cryptocurrencies such as Ethereum were expected to continue to gain more market share, but this is not the case.

Related reading | Sentiment Dangerously Negative as Crypto Fear Index Drops to Two-Year Low

Instead, what happened is that Bitcoin’s dominance has returned to a seven-month high. It currently sits above 46%, the last time its dominance was this high was after the September crash in October 2021.

This advantage is also evident in the performance of digital assets compared to other indices in the space. May hit all indices hard, leading to double-digit losses across the board, but BTC fared better compared to its peers.

BTC dominance recovers above 45% | Source: Market Cap BTC Dominance on TradingView.com

In May, the price of Bitcoin fell by a massive 24%. But small, mid-cap and large-cap indices all fared worse. Since the start of the month, the large-cap index is down 27% and the mid-cap index is down 31%. In true small-cap index fashion, it recorded its biggest losses when the market was in a downtrend, down 37% since the beginning of the month.

Altcoins don’t look too hot

The altcoin market is one that attracts investors because of its high promise of maximum returns. This has allowed the market to flourish throughout the bull market rally. But just as they can go higher during a bull market, they can also suffer the most during a market sell-off. It has been so in recent months. While Bitcoin was able to maintain over 40% of its all-time high value, the same cannot be said for many altcoins.

Bitcoin Index

BTC outperforms other indexes | Source: Arcane Research

Cardano is an example. ADA recorded one of the biggest rallies during the 2021 bull market, but it is also one of the hardest-hit cryptocurrencies in the bear market. It has lost more than 84% of its value since hitting an all-time high of $3.10 in September.

Related reading | Bitcoin on-chain activity limited after LUNA crash

Dogecoin, investors’ favorite meme coin, has lost more than 89% of its value from its all-time high. Shares of Solana fell more than 80%. Compared to these, Bitcoin has been one of the best performers in the market, which explains why its dominance continues to grow.

Featured image from The Washington Independent, charts from Arcane Research and TradingView.com

follow Best Owie on Twitter Get market insights, updates and the occasional interesting tweet…



Source link