Bitcoin dominance continues to break through local highs

Bitcoin dominance continues to break through local highs

BTC dominance continues to break through local highs, reaching 46.5%, whileBitcoin closed its ninth weekly red candle in a row.

Dominance is a measure of the share of the global criptocurrency byBitcoin.

Until March 2017 the dominance ofBitcoin held above 95%, as there were few competing digital currencies until the ICO boom. During the 2017 bull run, the dominance ofBitcoin fell from 95% to a low of 35% by January 2018.

The timing came within 30 days of the top for the cycle forBitcoin and was directly linked to the blow-off top for the peak of ether. After reaching the bottom, the price of ether rose to 73% by September 2019 while the price of ether dropped 87% to $171.

The price of Bitcoins had fallen by 20% from January 2018 to September 2019 onwards. What will happen to the rest of the market if the dominance of the digital currency goes up in 2022 as it has in previous halving cycles?

The price ofEthereum versusBitcoin has recently reached a yearly low after concerns on the Ethereum Beacon ChainEthereum Beacon Chain resulted in downward price pressure onEthereum. If you combine some of the other top altcoins with Bitcoins, a similar trend can be seen.

The chart below shows the comparison of Ethereum, Binance Coin, and Cardano toBitcoin. There is a 74% downside potential for altcoins when they are valued againstBitcoins if the decline continues with a rise in Bitcoin dominance.

The global market cap of the industry is around $1.3 trillion with the market cap ofBitcoin making up $580 million. If Bitcoin's price and global market cap stay the same over the next few months, it's dominance increases back to 2019 levels that would leave just $350 million for the rest of the industry and over 19,000 projects. The current cycle of cryptocurrencies could be no different, as the weaker projects were weeded out by the winter.

The strength of the markets is a key indicator of the dominance ofBitcoin, which is a key indicator for the strength of the markets at large. When the price ofBitcoin goes up while its dominance decreases or stays the same, it means that the wider industry is seeing growth. It is usually a sign of a weakening in the industry and positive for Bitcoin maximalists when dominance increases.