Data shows the altcoin dominance by volume on exchanges has now risen to 50%, here’s what happened to Bitcoin the last two times the crypto market saw such a shift.
Altcoins now contribute to 50% of all volumes on exchanges
In a CryptoQuant article, an analyst noted that altcoins now dominate the market after Bitcoin was no.1 for one month.
The relevant indicator here is the “trading volume,” which is a measure of the total amount of coins being traded on centralized exchanges.
The percentage to this total trading volume being contributed by an individual crypto is called its “dominance by volume.”
Below is a graph that illustrates how Bitcoin, Ethereum and other altcoin dominances stack up against one another over the past month.
Source: CryptoQuant| Source: CryptoQuant
You can see that Bitcoin was the most popular cryptocurrency for a large portion of the previous month. But, things have changed in the last few days.
BTC’s dominance of the trading volume dropping off has given more room to the altcoins, who now contribute to around 50% of the volumes on exchanges.
As for Ethereum, the crypto’s volume hasn’t observed any significant shifts recently, with the coin’s dominance moving sideways just below the 30% mark.
Altcoins enjoyed similar dominance during the last year. This chart illustrates how Bitcoin prices behaved over these two periods.
These stretches saw altcoin dominance reach as high as 60%| Source: CryptoQuant
From the graph, it’s apparent that the first of these altcoin dominated periods occurred back between November 2021 and January 2022. Bitcoin’s price at the start of the period was approximately $67k. By the end, it had dropped to $36k.
This was the second stretch of very high altcoin volume that took place in April-June of 2018. Much like the first, BTC saw an even greater drop as its price dropped from $47k down to $20k.
Bitcoin may be in trouble if altcoins maintain their dominance of trading on exchanges.
Bitcoin price
At the time of writing, Bitcoin’s price floats around $19.3k, down 1% in the last week. The crypto’s value has increased by 1% over the last month.
BTC is stuck in consolidation -- Source: BTCUSD on TradingView| Source: BTCUSD on TradingView
Featured image by Traxer, Unsplash.com. Charts from TradingView.com. CryptoQuant.com.