Bitcoin Dominance Highest in Three Years, But Altcoins Could Rally According to Analysts

Bitcoin Dominance Reaches Three-Year High, But Altcoins Could Reach Higher, Analysts Say

Bitcoin’s market cap now accounts for more than 55.05% of the total market cap, the highest level in three years. Bitcoin’s market cap has skyrocketed to $1.27 trillion, according to CoinMarketCap. By comparison, the entire crypto market is valued at $2.43 trillion, with Ethereum representing 16.5% of the market at $389 billion.

This year’s surge in Bitcoin dominance is somewhat unexpected. Typically, altcoins outperform Bitcoin during bull markets. While meme coins experienced a resurgence earlier this year when Bitcoin reached all-time highs, other cryptocurrencies haven’t benefited as much from the so-called “wealth effect.”

Meltem Demirors, former chief strategy officer at CoinShares, highlighted a key factor influencing this shift on Twitter: “ETF flows are fundamentally changing market dynamics. BTC gains no longer translate into altcoins and the longer tail of crypto assets.”

Bitcoin’s dominance has continued to grow despite the rising market cap of Tether (USDT), the world’s largest stablecoin and the third-largest cryptocurrency after Bitcoin and Ethereum. Stablecoins backed by fiat currencies are often excluded from Bitcoin dominance metrics due to their different value models.

Despite the lackluster performance of altcoins, there is optimism for their potential revival. CryptoQuant CEO Ki Young Ju noted on Tuesday that whales are preparing for the next altcoin rally as there has been an increase in limit buy orders for non-Bitcoin and non-Ethereum assets.

Ki Young Ju shared a chart showing that the cumulative bid-ask volume difference has been increasing for several months. This indicator measures the difference between buy and sell orders over a year to create resistance and support levels. When the trend is upward, it indicates that more people are placing buy orders, reflecting strong buying interest.