Key Points
- Bitcoin’s market dominance is faltering, leading to speculation that it may have peaked.
- Decrease in Bitcoin’s dominance could signal a potential upswing in the altcoin market.
Bitcoin’s (BTC) market share appears to be waning, causing some crypto analysts to suggest it may have reached its zenith. Traders are seemingly shifting their focus to altcoins.
Michaël van de Poppe, founder of MNTrading, stated on May 1 that “Bitcoin dominance has likely peaked”. He further noted that “the bottom for altcoins is likely in.”
Rotation Towards Altcoins
Van de Poppe also observed that altcoins are beginning to show activity in their Bitcoin pairs, indicating a rotation has started.
A decrease in Bitcoin’s dominance can be a signal of a potential upswing in the altcoin market. This is because investors often move their capital from Bitcoin, which is considered a more stable store of value in the crypto market, to altcoins, known for their volatility.
Crypto trader Matthew Hyland also noted that “Bitcoin dominance is now losing major support”, but he plans to wait for the weekly close before confirming or denying “the breakdown.”
As per TradingView data, Bitcoin’s dominance, which measures Bitcoin’s share of the total crypto market capitalization, is 53.90%. This is a decrease of 1.75% over the past seven days, but still an increase of 4.63% since the start of the year.
Altcoins Showing Resilience
In a May 1 post, trading team IncomeSharks noted, “If the price continues to chop for a few months, alts could take advantage.” They further observed that many altcoins were holding up surprisingly well.
Solana (SOL), PEPE (PEPE), and Dogwifhat (WIF) have all seen slight increases over the past 24 hours, according to CoinMarketCap data. This comes as Bitcoin’s price fell by 10.44% over the same seven-day period.
However, the current market sentiment casts doubt on speculations that Bitcoin’s dominance has peaked. Rising fear levels indicate market uncertainty and could drive traders to reallocate funds back into Bitcoin rather than riskier crypto assets.
The Crypto Fear and Greed Index shows that May 1 reflects the highest level of fear among crypto market investors this year to date. The index score fell to a “fear” level of 43, down from the previous day’s “neutral” score of 54.
