Bitcoin’s dominance rate, indicating its share in the total cryptocurrency market capitalization, has neared the 50% mark. This is the first time such a shift has been observed since April 2021, according to data tracked by TradingView.
This surge in Bitcoin’s dominance comes in the wake of significant losses suffered by various alternative cryptocurrencies (altcoins) like SOL, MATIC, ADA, and DOGE. The source of this downturn could be linked to a proprietary trading firm, Scimitar Capital’s, hefty liquidation of $2 billion from their crypto holdings, as suggested by Danny Lucas on Twitter.
Scimitar Capital liquidated $2bn of their crypto holdings, which might have been the direct cause of this sudden drop.#crypto #bitcoin pic.twitter.com/MJeq7h8HzH
— Danny Lucas (@realDannyLucas_) June 10, 2023
This substantial move from the firm has likely fueled the market rumblings, leading these altcoins to experience steep double-digit losses.
However, Bitcoin managed to contain its losses to just 3%, possibly due to increased haven demand. As investors move their capital out of altcoins and into Bitcoin, the world’s largest and most liquid cryptocurrency, its relative dominance appears to be “mooning” according to a tweet from a crypto trader and analyst Skew.
$BTC.D
Bitcoin’s relative dominance mooning amid altcoin market sell offFlight to majors (1st stage before crashes occur) pic.twitter.com/fQVErhrLQq
— Skew Δ (@52kskew) June 10, 2023
The steady rise in Bitcoin’s dominance rate has been observed since November, with a notable surge during the March U.S. banking crisis.
“The indicator now looks to be breaking out of its three-year oscillation pattern, a sign of continued Bitcoin outperformance in the months ahead,” stated Lewis Harland from Decentral Park Capital.
Interestingly, Tether, the world’s largest dollar-pegged stablecoin, also appears to have benefitted from the recent risk aversion in the crypto market. Its dominance rate has jumped 5% to 7.82%, the highest since January 8, as per TradingView data.
