Bitcoin Market Dominance Analysis

Since the beginning of the cryptocurrencies era, everything has always been tightly linked to Bitcoin. Yes, almost all altcoins (if not all) could not decide their own faith. It means that these other cryptocurrencies have always been dependent on the Bitcoin trend. 

When Bitcoin price goes up for months or for years, altcoin prices often follow. When Bitcoin goes down for a long period of time, altcoin prices often go down even harder. This has been going on for more than a decade, and it might not change anytime soon.

What does it mean for us? Well, it means that we cannot ignore Bitcoin price action; it doesn’t matter whatever coin we decide to invest our money in. That’s also the reason why it’s very important to analyze Bitcoin market dominance against altcoins because it could be the perfect indicator to see when we will have the next altseason, which will be our opportunity to maximize our profits in the crypto market.

For your information, Bitcoin market dominance is basically the chart that shows how “dominant” Bitcoin is against altcoins. Occasionally, whales (big traders) dump Bitcoin to pump various altcoins, before eventually they dump altcoins to buy fiat currencies or back to Bitcoin. This article will try to analyze Bitcoin market dominance.

The Sea Of Altcoins And Traders’ Greed

Before February 2017, we never really had a sharp decline in Bitcoin market dominance against altcoins. I mean, it happened several times, such as August-December 2014 and January-March 2016, but they were nothing compared to the sharp declines in 2017. So, what actually happened in 2017?

Well, there was a sea of new altcoins in early 2017. Compared to the years before, 2017 was considered the golden era of altcoins. And because Bitcoin price had been going up since early 2015 until 2017, a lot of traders already had a lot of profits in their hands. And instead of trying to realize those profits by selling BTC to fiat currencies, they tried to make even more profits by selling BTC to altcoins, instead. 

By doing this, they could easily make hundreds of percentage of ROI (return of income) due to these altcoins’ small liquidity and low market cap. So, basically, the rise of altcoins back in 2017 was due to the traders’ greed who saw the big opportunity to make a huge profit. And yes, many analysts believe these same whales (big traders) are still trading cryptocurrencies even until today. It looks like they might repeat what happened in 2017 when the opportunity arises.

The Almost “Flippening”

So, as mentioned earlier, February 2017 was the beginning of Bitcoin’s sharp decline in its market dominance against altcoins. The peak of that altseason was in June 2017 when the “flippening” between Bitcoin and Ethereum almost happened. Yep, Ethereum only had 5.92% of the crypto market back in February 2017, and it peaked at 31.17% only four months later. For comparison, Bitcoin started at 86.06% (February 2017), and it went down to 37.84% (June 2017).

Many crypto analysts called for “flippening” at the time, which means the flip between Bitcoin and Ethereum as number 1 and number 2 in the crypto rankings by market cap. That looked possible at the time, and Ethereum was already considered a better technology than Bitcoin due to its capabilities to develop smart contracts. 

However, what happened next was not what these people were expecting. Bitcoin actually regained its market dominance for the next six months (June to December 2017) while Ethereum and other altcoins were slowly losing their dominance in the crypto space. Such unpredictable movements were probably caused by the same whales who wanted to set their own trends. Bitcoin itself went as far as $19,000 in December 2017 in some crypto exchanges.

The One Month Altseason

Back on December 10, 2017, Bitcoin successfully regained its market dominance against altcoins. After the struggle at 37.84% market dominance in June 2017, Bitcoin slowly went up back to 62.80% in December 2017. At the same time, Bitcoin kept going up against US Dollars and other fiat currencies. Almost everybody thought nothing could stop Bitcoin due to its dominance against every other currency out there (both altcoins and fiat currencies).

However, the whales suddenly chose to dump Bitcoin back to altcoins (just like how they did it in early 2017). This time, Bitcoin’s dominance sharply declined from 62.80% to 32.81% within just one month. As a result, many random altcoins kept getting pumped. Ethereum also enjoyed a rise in the market dominance from 10.31% to 20.58%.

This period (December 2017 to January 2018) was considered the best month ever for the rise of altcoins. Different from beginning 2017 to June of the same year, the sharp rise in December 2017 to January 2018 happened within just one month. Many altcoins successfully went up for hundreds of percentages in terms of price. 

The honeymoon did not last long. After January 2018, the price for all cryptocurrencies kept crashing for about a year. Many altcoins lost their valuation for more than 90%. Bitcoin itself kept going down to below $3300 in December 2018. Overall, 2018 was considered a “crypto winter” due to how depressed the crypto market was.

Analyzing The Current Bitcoin Market Dominance

So, how about now? Well, since 2018 until today, it looks like Bitcoin has been slowly regaining its market dominance again. At the time this post was written, Bitcoin was still dominating the crypto market at 65.82% while Ethereum was comfortably sitting in second place at 7.74%. It doesn’t look like the market shares would change anytime soon.

Many analysts say that altseason might happen again in the near future, but only if the whales already make enough profit from Bitcoin’s rise. Judging by the current rise of BTC price against fiat currencies, that could mean anytime soon or maybe in the next few years. Nobody truly knows.

One thing that I have learned from this Bitcoin market dominance analysis is that everything can happen quite unexpectedly. Nobody expected the altcoins’ rise from February to June 2017 nor the one from December 2017 to January 2018. At the present time, it’s very hard to predict when we will have the next altseason. But, when we finally have the next altseason, most likely, altcoins would rise quite fast while Bitcoin market dominance would fall sharply at the same time. Many crypto traders are waiting for that moment.

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