Bitcoin’s Rising Dominance Rate Challenges Altcoin Boom From 2021
Bitcoin’s (BTC) dominance rate or share in the overall crypto market continues to rise, threatening to reverse alternative cryptocurrencies (altcoins) BTC-beating rally from early 2021.
The dominance rate rose to 52.45% on Monday, reaching the highest since April 2021, according to data tracked by the charting platform TradingView.
The ascent is consistent with the bullish breakout seen in June, which marked the end of a prolonged range play between 38% and 48%.
According to technical analysis by Fairlead Strategies, it’s likely to continue in the coming days, reversing the decline from 60% to 40% seen during the hazy crypto bull market days of March-April 2021. Investors then rotated money from the relatively expensive bitcoin into altcoins, leading to a decline in BTC’s dominance rate.
“The index is poised to extend higher, especially after resolving a two-year trading range higher this summer,” Katie Stockton, founder and managing partner at Fairlead Strategies, said in a note to clients on Monday.
“Our long-term trend-following indicators also support more bitcoin dominance, and there is room to the next resistance. We expect bitcoin to outperform altcoins, further reversing altcoin gains made in 1H2021,” Stockton added.
The focus will shift to key Fibonacci resistance at 60.17% once the dominance rate establishes a foothold above the June high of 52.18%. As of writing, the dominance rate stood at 51.68%.
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