The cryptocurrency market’s recent dominance by Bitcoin has decreased below 50%, indicating a potential adverse trend as retail activity increases. This change prompts inquiries regarding market dynamics and investor sentiment.
Bitcoin’s dominance has been a critical indicator of whether the market is in a bull or negative cycle throughout history. As Bitcoin’s dominance is growing, usually, it means a defensive market where investors would prefer the relatively safer alternative of rather than altcoins.
Whereas a fall usually means the investor is likely to increase his risk and very often prefers to invest in altcoins for possible higher returns.
Crypto analyst Alan Santana identified three significant warning signals for Bitcoin’s dominance in an X post on Tuesday, as retail investors resumed trading after an extended period of inactivity.
🅱️ 3 Bitcoin Dominance Bearish Signals + Fibonacci Time Calculations
I would like to show here mainly three signals that can be considered bearish on this chart, Bitcoin Dominance (BTC.D).
1) There is a Doji on the 16th of September. Coming at the top of a trend…
— Alan Santana (@lamatrades1111)
The Increase In Retail Activity
As Bitcoin’s supremacy wanes, retail investors are getting increasingly active. Usually, this rise in retail involvement comes with a decline in Bitcoin’s market share since these investors transfer to altcoins in search of better earnings.
The current situation is reminiscent of previous cycles, during which the increase in retail interest resulted in a substantial decrease in For example, Bitcoin’s dominance declined significantly during the 2021 bull market as new altcoins gained momentum, diverting attention from the original cryptocurrency.
BTCUSD trading at $66,834 on the daily chart:
General Shift In Investor Mood
Market experts say that this trend isn’t just a one-time thing; it’s a sign of larger changes in how investors act. As non-fungible tokens (NFTs) and decentralized finance (DeFi) have grown, altcoins have become more appealing.
A lot of investors think that networks like Ethereum, which support smart contracts and decentralized apps, are more flexible than Bitcoin these days. This change could be a sign of a bigger shift in how people think about and use cryptocurrencies.
Bitcoin has seen a trend of fluctuations in dominance since its inception in 2009. Starting with an almost 100% market share, it began to decline slowly with the introduction of more altcoins.
Bitcoin fell crucially during both the ICO boom of 2017 and the DeFi surge of 2021, at which time it fell to below 40% dominance. Given such historical precedents, this might represent another such phase where altcoins do outperform Bitcoin, especially when retail interest is growing.
Experts believe that this can cause the crypto markets to become even more volatile in the future if this continues. Declines in dominance are often precursors to speculative trading, which subsequently causes prices of both Bitcoin and altcoins to fluctuate wildly.
The current level of Bitcoin dominance functions as a gauge of the general market sentiment. Many speculators are reassessing their strategies as it continues to decline.
Featured image using Dall.E, chart from TradingView
They say journalists never truly clock out. But for Christian, that's not just a metaphor, it's a lifestyle. By day, he navigates the ever-shifting tides of the cryptocurrency market, wielding words like a seasoned editor and crafting articles that decipher the jargon for the masses. When the PC goes on hibernate mode, however, his pursuits take a more mechanical (and sometimes philosophical) turn.
Read more
Christian's journey with the written word began long before the age of Bitcoin. In the hallowed halls of academia, he honed his craft as a feature writer for his college paper. This early love for storytelling paved the way for a successful stint as an editor at a data engineering firm, where his first-month essay win funded a months-long supply of doggie and kitty treats – a testament to his dedication to his furry companions (more on that later).
Christian then roamed the world of journalism, working at newspapers in Canada and even South Korea. He finally settled down at a local news giant in his hometown in the Philippines for a decade, becoming a total news junkie. But then, something new caught his eye: cryptocurrency. It was like a treasure hunt mixed with storytelling - right up his alley!
So, he landed a killer gig at NewsBTC, where he's one of the go-to guys for all things crypto. He breaks down this confusing stuff into bite-sized pieces, making it easy for anyone to understand (he salutes his management team for teaching him this skill).
Think Christian's all work and no play? Not a chance! When he's not at his computer, you'll find him indulging his passion for motorbikes. A true gearhead, Christian loves tinkering with his bike and savoring the joy of the open road on his 320-cc Yamaha R3. Once a speed demon who hit 120mph (a feat he vowed never to repeat), he now prefers leisurely rides along the coast, enjoying the wind in his thinning hair.
Speaking of chill, Christian's got a crew of furry friends waiting for him at home. Two cats and a dog. He swears cats are way smarter than dogs (sorry, Grizzly), but he adores them all anyway. Apparently, watching his pets just chillin’ helps him analyze and write meticulously formatted articles even better.
Here's the thing about this guy: He works a lot, but he keeps himself fueled by enough coffee to make it through the day - and some seriously delicious (Filipino) food. He says a delectable meal is the secret ingredient to a killer article. And after a long day of crypto crusading, he unwinds with some rum (mixed with milk) while watching slapstick movies.
Looking ahead, Christian sees a bright future with NewsBTC. He says he sees himself privileged to be part of an awesome organization, sharing his expertise and passion with a community he values, and fellow editors - and bosses - he deeply respects.
So, the next time you tread into the world of cryptocurrency, remember the man behind the words – the crypto crusader, the grease monkey, and the feline philosopher, all rolled into one.
Close
Disclaimer: The information found on NewsBTC is for educational purposes
only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any
investments and naturally investing carries risks. You are advised to conduct your own
research before making any investment decisions. Use information provided on this website
entirely at your own risk.
