Bitcoin Dominance to ease?
According to Binance, it may be time for Bitcoin’s market share to drop back, allowing alts to recover — even if a full-blown ‘Alts Season’ isn’t on the cards.
It’s been a pretty awesome few months for bitcoin. The correction of the last few weeks notwithstanding, action since April has been outstanding, with bitcoin tripling in price since its bottom at the beginning of the year, and apparently consolidating around the $10k mark.
As good as it’s been for bitcoin, it’s been as bad for the alts. As bitcoin soared, the alts have crashed against BTC, and even against USD. Bitcoin dominance has risen to almost 70% — and some analysts suggest it will hit 80%.
All eyes are on bitcoin, and there’s not a lot of oxygen left over for the alts. The conversation around alts has started to shift recently. The question used to be, ‘When will alts season start?’ Now, the community is scared that alts are on their way out — that many will never recover. They will go to zero.
This is classic market psychology, and the same occurs in a bitcoin bear market. The thought process is essentially, ‘The price has crashed and is continuing to go down — it will keep going down forever!’
While there are some alts projects that do not deserve to survive, this view is irrational for the most part. There will be a bottom, somewhere, and a recovery. Where, we can’t say for sure. But a recent report from Binance suggests that, while it may not be imminent, it will occur in the medium-term. Binance’s recent summary report states:
In our July edition, we stated that we eventually believe BTC dominance will go back down to the 50–60% range. We still believe in this, partly because BTC dominance was below 60% for an extended period, from May 2017 until June 2019. It has only been in the past three months or so that BTC dominance has shot up so dramatically, and the crypto-world has found its way of making everyone feel like a prisoner of the moment. Short-term wise though, BTC dominance may be sticking around.
In other words, this level of Bitcoin Dominance is unusual. We might not expect the 30–35% Dominance we saw in the last alts bull market, but 70% is historically unusual for a developed crypto landscape, and a pullback to 60% would not be unlikely.
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