Bitcoin Dominance Hits Highest Level Since April 2021
Bitcoin Dominance reached 52.7% over the past week, marking its highest level in three years.
Bitcoin Dominance Hits Highest Level Since April 2021. Image: AMBCrypto
Bitcoin Dominance, a measure of Bitcoin's market capitalization relative to the total cryptocurrency market cap, surged to 52.7% last week. This is the highest level observed since April 2021.
Bitcoin Dominance Surpasses 52.7%. Source: CoinStats
The dominance of BTC began climbing from 48.2% on June 22 to 51.9%. Following the launch of the Ethereum ETF, the upward trend continued steadily.
Notably, a sell-off hit the market right after the Ethereum ETF launch, yet Bitcoin remained one of the strongest performers, even reaching new highs of $70,000. This resilience is attributed to the market absorbing negative news, such as Mt. Gox's repayments and the German government liquidating $3 billion in Bitcoin.
1-hour BTC/USDT Chart on Binance as of 09:45 AM, July 31, 2024
In contrast, ETH displayed weakness in price action. The ETH ETF milestone seemed to trigger a "sell the news" reaction, causing ETH prices to reverse. Other altcoins also lagged, reinforcing BTC's dominance at a three-year high.
Source: Coin360
Several factors may explain Bitcoin's strength:
- Bitcoin avoided risks related to the conversion of Grayscale’s GBTC, whereas ETH is still facing outflows from Grayscale’s ETHE.
- BTC remains the only cryptocurrency with an established ETF, while the ETH ETF has only been trading for a week. Thus, BTC continues to benefit from inflows from traditional investors seeking cryptocurrency exposure through ETFs.
- The rise in Bitcoin Dominance coincides with the Bitcoin 2024 Conference, a highly anticipated event featuring U.S. presidential candidate Donald Trump. Given Trump's pro-Bitcoin stance, the market might be pricing in potential statements and plans related to BTC if he were to be re-elected.
