Why Higher BITCOIN Dominance Is A Good Thing !

in LeoFinancelast month

Bitcoin dominance plays a very important role in the crypto markets — we all know that. Some people don’t consider a rise in Bitcoin dominance to be good for altcoins, and to some extent, they’re right. That’s because whenever Bitcoin dominance increases, money tends to flow out of altcoins and into Bitcoin. Investors prefer to move towards safer assets during such times.

However, there are some scenarios where an increase in Bitcoin dominance can actually be very beneficial for altcoins. For example, at the end of the 4-year crypto cycle, when it's altcoins' turn to rise. As Bitcoin goes higher and its dominance increases, more money will flow into altcoins, causing them to pump with a higher percentage.

As you can see, Bitcoin's dominance has broken its previous top this time and has risen above 65%. I believe that either it will reverse from here or it could go up to 70%, and then reverse. I'll show you an example with the chart from 2021 when it reversed.

As you can see, in 2021, Bitcoin's dominance dropped from 73% to 39%. It is believed that dominance returns to the origin of the pump in each cycle. When Bitcoin's dominance dropped in 2021, it came down to 39.74%, then moved sideways for a while before the next cycle started. If this pattern repeats, Bitcoin's dominance should drop to 44% or 47% in this cycle. You can see this from the charts.

So, the final thoughts are that we may have to wait a few more months. Bitcoin's dominance could either come back down from 66-67% or it could rise to a maximum of 70-71% and then get rejected from there. In my opinion, this would still be good for the altcoin season. It's not financial advice. DYOR (Do Your Own Research)

Regards,
@itwithsm

Posted Using INLEO

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