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BitcoinSistemi 2025-02-28 18:39:08

Bitcoin Dominance Peaks: What Does It Mean for Altcoin Season?

Bitcoin’s share of the cryptocurrency market has surged to its highest level in four years, reflecting a shift toward safety among investors. The world’s largest cryptocurrency now accounts for more than 60% of the $2.9 trillion digital asset market, marking the highest BTC dominance since February 2021. Market analysts attribute Bitcoin’s growing dominance to a broader risk-off sentiment in the crypto space. Mike Cahill, director of Pyth Data Association, said the rise in Bitcoin dominance signals a cautious environment where investors are opting for the relative stability of Bitcoin over speculative assets. “When liquidity is concentrated in Bitcoin, it is usually a sign of a cautious market that expects stronger persuasion in riskier assets,” Cahill said. This trend suggests that expectations of a widespread “alt season” similar to the rally in late 2021 may not be realized. During that time, Bitcoin’s dominance waned while almost all cryptocurrencies made significant gains. However, in the current market, only a select group of altcoins have a high correlation with Bitcoin, suggesting a more selective altcoin rally. Related News: Historic Bitcoin Move from BlackRock: They're Adding BTC to Their Model Portfolio - What Does It Mean? During the “DeFi summer” between mid-2021 and late 2022, Bitcoin’s market share fell by as much as 40% as investors flocked to decentralized finance (DeFi) projects. However, the crash of key tokens like Terra (LUNA) in 2022, wiping $40 billion off the market, marked the beginning of a bearish trend for speculative assets. “A lot of people have been hurt and disappointed by altcoins,” said Jameson Lopp, CTO of crypto custody firm Casa, noting that many investors now view the crypto market as “a huge risk” and have either exited completely or moved to Bitcoin. One of the key drivers behind Bitcoin’s growing dominance is institutional adoption. Since the launch of Bitcoin exchange-traded funds (ETFs) on Wall Street in January 2024, institutional investors have been increasing their exposure to Bitcoin through sophisticated risk and arbitrage strategies. “Bitcoin is trading on a macro scale compared to other cryptocurrencies,” said Greg Magadini, Director of Derivatives at Amberdata. *This is not investment advice. Continue Reading: Bitcoin Dominance Peaks: What Does It Mean for Altcoin Season?

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