BTC’s Market Dominance Increases as it Outperforms other Altcoins
Bitcoin has been on a rollercoaster ride in recent weeks, with the cryptocurrency experiencing significant price swings.
However, this week, Bitcoin has surged to multi-month highs, outperforming its major altcoin peers, amid a growing narrative amongst crypto and traditional asset class investors that Bitcoin might actually be a viable safe haven against potential turmoil in the traditional fiat-based fractional reserve banking system.
According to TradingView, Bitcoin dominance (i.e., the percentage of the cryptocurrency market’s total capitalization taken up by Bitcoin) hit its highest level in nine months above 45.5% on Wednesday. This comes after the BTC/ETH exchange rate hit its highest level since November around 15 earlier this week.
Meanwhile, BTC/BNB is near its highest since last August around 80, BTC/XRP is at its best levels since last September above 62,200, while BTC/ADA is at its lowest level since early 2021. Blockchaincenter.net’s Altcoin Season Index has thus slumped firmly back into “Bitcoin Season” (defined as scores below 25, with the current score 22), down from late February highs in the 47 area.
Bitcoin’s leap in dominance comes after the cryptocurrency hit its highest levels since last June in the mid-$26,000s earlier this week, a stunning recovery from last week’s dip to new two-month lows under the $20,000 level. Last week’s dip was triggered by broader risk-off flows after a spate of crypto/tech-friendly US banks went under.
This week’s recovery was triggered by a combination of bullish factors, analysts think, including 1) a proactive response from US authorities to backstop deposits and 2) launch a new bank liquidity program (which helped USDC, a key part of the crypto market’s plumbing, recover back to its $1 peg), and 3) expectations that the risk of a banking crisis would deter the Fed from engaging in substantial further rate hikes.
The aforementioned narrative around Bitcoin being a safe haven against trouble in the traditional financial system is also touted to have helped, just as it is being touted as boosting Bitcoin versus its major crypto rivals. What the cause of the rebound, analyst price predictions have become substantially more bullish.