Bitcoin’s dominance is collapsing while Altcoins are performing better
Altcoins have largely exceeded Bitcoin last week.
The domination of Bitcoin has fallen following the rise of Ethereum.
Despite a general decline in the market, things seem solid in the current political context.
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After attracting the attention of the high-tech world with an uncontrolled rise in its share price, Bitcoin was beaten last week. 92% of Altcoins outperformed Crypto Legacy this week.
At the time of writing, Bitcoin was down about 12% against the dollar since its weekly opening. This also marks a 25% decline from its historical high of $42,000, reached on January 8, 2021. Bitcoin’s market capitalization is now approximately $592 billion, nearly $200 billion less than those highs.
And while the rest of the market was a little pulled down with BTC, Altcoin was holding its own. According to Messari’s data, 92% outperformed Bitcoin in the last 7 days ending January 20, 2021.
Bitcoin got a little too hot
The move from Bitcoin to $20,000 was not entirely unexpected, but the move to $40,000 was so rapid that many predicted a cooling.
Similarly, despite the fact that Ethereum had been the main driving force behind the madness for DeFi, its increase had lagged a few weeks behind Bitcoin’s. So money probably moved from Bitcoin to Altcoins as traders sought to capitalize more gains and focused on accumulating satoshis.
Perhaps most telling is the Bitcoin domination chart. Bitcoin’s dominance in the crypto market reached 72% in early January, its highest level in a year. Since then, the dominance has followed a downward trend and is now around 65%.
Researchers at LongHash, a company that analyzes crypto data, found that altcoin was doing well.
According to LongHash, the top 69 altcoins with trading volumes over $100 million had an excellent week. Only 33% saw their prices drop in dollars. On the other hand, 46 of these tokens saw their price increase by more than 10% during this week (these prices have since fallen).
In a bullish comment, the company’s researchers said that Ethereum’s market capitalization could quadruple if it kept pace with the growth that Bitcoin has experienced.
A new president, a new background
For a number of reasons, analysts predicted that US President Joe Biden’s administration would be good at fighting the pandemic and for financial stability.
Although part of his team is optimistic about the cryptos, the stock market’s rally to a record high on inauguration day says a lot about what the markets think. It’s possible that money is moving from crypto to stocks.
Biden’s policy could see much of that cash flow return to crypto, as investors see Bitcoin as a hedge against the dollar.
A season of altcoins missed
Even though the Altcoin fell during the downturn on January 21, there could be another Altcoin season on the horizon. According to the „Altcoin Season“ Index, the rise in Bitcoin has been so dominant that few Tokens have outperformed it in the past 90 days.
Nevertheless, if institutional investors continue to take positions in crypto, they may seek to delve a little deeper into it than into simple Bitcoin. Moreover, with sectors such as DeFi, active use cases could be stronger than ever.
