Recently, the dominance of Bitcoin has seen a downward trend, which has encouraged the excitement of crypto enthusiasts and analysts who see this as an indication of the bull run. Such performance suggests that each of the times the leading token’s market share dropped, it preceded a surge in most other digital currencies.
Watching Bitcoin Dominance Decline
“Looking at this chart, we can see that, historically, major bull runs across the market have coincided with declines in #Bitcoin dominance.” – By @Woo_Minkyu
Read more 👇https://t.co/hM4olMucbN pic.twitter.com/gLnQWHjGQL
— CryptoQuant.com (@cryptoquant_com) October 31, 2024
Bitcoin Dominance Decline: A Bullish Indicator?
Dominance is an indication of how much of the market capitalization is owned by Bitcoin at a given time and a high value indicates that most of it is owned by Bitcoin. However, a decline shows that investors are more willing to invest in other coins, known as “altcoins.” Such a shift has historically coincided with significant increases in the prices of cryptocurrencies, for example, during two major uptrends in 2017 and 2020.
Recently, CryptoQuant analyst Woominkyu also pointed out this effect, emphasizing that the token dominance came down in previous cycles, leading to bull runs. From Woominkyu’s view, decreasing dominance indicates that capital moves to altcoins, which indicates the start of a general market upturn. “The Bitcoin bull market typically occurs when its dominance is on the decline,” he stated.
What’s Next for the Crypto Market?
If the pattern persists, a current decrease in dominance might signify that altcoins are back on the radar of investors, which can result in higher values across the board for digital assets.While such trends may not necessarily hold for the future, Woominkyu’s analysis has drawn attention, and many are waiting to see whether or not the decline in Bitcoin dominance will mean a new crypto bull run.
