here’s how far Bitcoin’s dominance needs to drop before altcoins can rally

This Exchange News was brought to you by OKCoin, our preferred Exchange Partner.

Bitcoin’s recent uptrend has come about largely at the expense of smaller digital assets, as many altcoins have posted a severe underperformance of BTC as investors grow increasingly keen on finding assets that can perform well given the current global economic situation.

Some major cryptocurrencies are even trading at price levels not seen since 2014 while looking towards their BTC trading pairs.

This has in turn led Bitcoin’s dominance over the crypto market to rise sharply in recent times, and one analyst is now noting that it may have to decline by 8 percent in order for altcoins to begin garnering upwards momentum.

Altcoins severely underperform Bitcoin as traders flock to liquidity

The ongoing economic crises seen across the globe has led investors within all markets to flock towards quality and liquidity.

In the case of the crypto markets, this has led to an exodus away from altcoins and towards Bitcoin.

Many major cryptocurrencies – including Ethereum and XRP – have gravely underperformed the benchmark digital asset throughout the past several weeks.

This trend is elucidated while looking towards Bitcoin’s dominance over the market, which currently sits at 67.4 percent. This marks a notable climb from mid-February lows of just under 60 percent that came about at the peak of the market.

Ever since then, this trend has firmly reversed, and Bitcoin now has the highest dominance over the crypto market seen since 2019.

Data via CoinMarketCap

One pseudonymous trader on Twitter named “Pentoshi” spoke about the poor performance altcoins have seen against BTC in recent times, noting that many are trading at levels not seen since 2014.

“ETH heading for levels not seen since 2016. LTC trading below 2014-2016 prices. XRP heading for levels from 2014, 2016, and 2017. The alt market looks like it could capitulate soon.”

Here’s how low BTC’s dominance needs to decline for altcoins to rally

Josh Rager – another well-respected cryptocurrency analyst on Twitter – explained that he believes Bitcoin’s dominance needs to decline towards 60 percent before altcoins can rally.

“BTC dominance has remained between 62% to 72% since June 2019. Before the next altcoin rally, would like to see a sharp move back down to low 60%. But if Bitcoin can get a close above $10,500 – would likely cause money to flow into BTC leading to increase in dominance.”

Bitcoin Altcoins
Image Courtesy of Josh Rager

Whether or not investors continue treating Bitcoin as a safe haven asset could also play a role in where its dominance over the market trends, as this could perpetuate the ongoing exodus away from altcoins.

This Exchange News was brought to you by OKCoin, our preferred Exchange Partner.

Cover Photo by Jack Prichett on Unsplash

Posted In: , Altcoins, Analysis

The above advertisement is an referral link.

Like what you see? Subscribe to CryptoSlate

Get our daily newsletter containing the top blockchain stories and crypto analysis straight to your inbox.

Sign up to stay informed

Cole Petersen

Cole is a freelance journalist and university student studying philosophy. He focuses primarily on covering cryptocurrency and blockchain-related news. He owns a non-life-changing sum of Bitcoin and enjoys day trading.

View author profile

Commitment to Transparency: The author of this article is invested and/or has an interest in one or more assets discussed in this post. CryptoSlate does not endorse any project or asset that may be mentioned or linked to in this article. Please take that into consideration when evaluating the content within this article.

Disclaimer: Our writers’ opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.