In the recent price crash on Saturday, Bitcoin fell down to $42k while Ethereum went down to $3,500. But the recovery of Ethereum was much faster, and it is now already back above $4,100. Even other altcoins are recovering, and some have even made past the losses to a new ATH. And as all this is happening, Bitcoin market dominance falls almost to its year low at 37.76%. This time it was at 38.32%. It is also not very far off from the all-time low of 33%.
What is market dominance?
There are several thousands of cryptocurrencies out there, and all of these have a combined market cap. At present, the market cap is between $2 trillion and $3 trillion, and out of this, Bitcoin constitutes a very big part. So, market dominance can be termed as the percentage of Bitcoin’s market cap vs. the total crypto market cap. When the price of Bitcoin rises more or falls less as compared to other coins in the crypto market, Bitcoin dominance increases. And if the price does rise as fast or falls faster when compared to other coins, then the market dominance falls.
Why is it important?
We can clearly see that Ethereum is outperforming Bitcoin, and this is slowly increasing the ETH dominance while Bitcoin falls. This could be a very big deal and can make investors more bullish for Ethereum, which can further increase the price. Also, note that falling BTC dominance also means rising altcoin dominance. This can signal another altcoin season which we all have been waiting for. Analysts say that we might see the alt season in the first quarter of 2022.
Therefore, it can signal investors that maybe it is time to invest more in altcoins and tokens that are outperforming Bitcoin. But there is a bigger question, does Bitcoin becoming the 2nd largest coin mean that it will no longer represent the crypto market? Well, I am not sure about that, but I don’t think that is happening.
What are your thoughts as Bitcoin market dominance falls in the recent flash crash? And do you think that Ethereum will soon flip Bitcoin? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
Also Read: Virtual Plot next to Snoop Dog sells for $450k in ETH.
