Bitcoin dominance is the bitcoin market share in the total market share of the crypto industry. At the moment of writing this Bitcoin is at 61.6% market dominance.
Historically there have been some movements in the BTC dominance (BTC.D) which indicates an altseason. Lets take a look at this and can we conclude where are we now.
The old saying, history never repeats but it often rhymes, is something that is used when it comes to the crypto industry and its four years cycles that are happening around the bitcoin halvings.
We have seen this in terms of price, and it have shown a remarkable similar pattern as the last two halvings in 2017 and 2013 before.
Unlike the price chart of BTC and the halving events the BTC dominance indicator seems to have a bit shorter history as most of the last were not around before 2015 or even 2017. Most of the historical data is from the 2017 halving and afterwards. Before 2017 BTC is just to dominant with more than 90% share of the market.
Here are some charts about the Bitcoin dominance.
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The above one is from coinmarketcap and it includes the other tokens as well, like Ethereum etc.
The clean BTC Dominance chart looks like this.
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This one is from tradingview and it’s a bit more clean than the CMC.
The period is from the middle of 2016 to February 2021. We can see the 90% plus BTC.D before 2017. Then the bull run in 2017 happened and the BTC dominance dropped to 36%.
From July 2017 the BTC dominance has been in the range of 36% to 73%.
In 2020 the BTC.D has been around the 64%, going from 57% to 70%.
Let’s take a look at the more recent months.
The period in the chart is from Aug 2020 to Feb 2021.
In this period the crypto market was mostly in bullish phase. The interesting thing is that in most of the period above Bitcoin has been increasing its dominance except for the last two months.
At the beginning of the year the BTC dominance reached a critical levels of 72% market dominance.
Afterword’s it has dropped to 60%, and now is around 64%. Now remember at the peak of the previous bull market and the altseason, the BTC dominance was just 36%. If this is an indicator for altseason we haven’t entered one yet.
Here is another interesting chart when it comes to bitcoin dominance and altseason.
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The chart above combines the two metrics:
- Bitcoin dominance [BTC.D]
- Bitcoin price [BTC]
For an altcoin season to happen you need a decreasing BTC dominance while the price of BTC keeps going up.
We want a BTC price that is going up and a decreasing bitcoin dominance at the same time. What this means is the alts will just outperform bitcoin in those conditions.
Where are we now?
If we take a look at 2017 in the period from July to November, the Bitcoin dominance kept increasing and growing. Then in December 2017 in a period of just two weeks a massive drop in the BTC dominance from around 70% to 36%.
In the last months we have seen bitcoin increasing in price and the bitcoin dominance increasing as well. This is the first chart from the photo above. This might be a similar pattern as the July-November 2017. If this is the case, we still have the mythical altseason just ahead of us.
Then if we take a look the volatility, it is much lower in the last months, in terms of the Bitcoin dominance, so there might be some more space for BTC dominance to go up again, before the alts catch up.
If 2017 plays out in a similar way in 2021 in terms of bitcoin dominance we might be on the verge of an altseason when BTC price goes up again in the next few months, or yet another leg for bitcoin, another drop and then an altseason probably later this year. Whatever the case is, judging from a 64% bitcoin market dominance, altseason is not even close to those 36% levels.
Will this mythical altseason happen at all this time? Maybe, maybe not. But in terms of price BTC has been acting a lot like in the previous cycles, so why not for the alts as well?
What is your opinion?
