The overall cryptocurrency market is suffering and Bitcoin dominance has soared. Investors are forced to flee from the market by current macro conditions and have turned to BTC or stablecoins for refuge.
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After moving in the opposite direction for several months, Bitcoin dominance seems to be on the rise. This metric is used to calculate the cryptocurrency market capital made up of Bitcoin. It stands at 47%, which is close to the November 2021 levels.
During this period, BTC’s price took a final move to the upside and reached $69,000 before an overall market crash took it to its year-over-year low at $24,000 in May 2022. Arcane Research recently released a report that indicated that BTC and USDT are dominating markets.
Currently the combined dominance of BTC, USDT, USDC, and BUSD sits at 59.2%, which is the highest dominance seen by this “flight to safety bundle” since early April 2021. The dominance of 59.2% in 2020 is only 5-10% away.
Bitcoin’s dominance was at its highest point of over 60%. This metric was impacted by the boom in non-fungible tokens, rise in popularity decentralized finance protocols (DeFi), memecoins such as DOGE and SHIB and the increase in market capital for cryptocurrency to over $2 trillion.
Arcane Research stated that Bitcoin, Ethereum and other popular stablecoins hold over 77% of the crypto market capital dominance. As investors try to prevent further losses, this paints an unfavorable picture for altcoins.
The current drawdown has hit the most important sectors of the crypto industry, once hot, DeFi protocols and NFTs.
NFT collections, such as Bored Ape Yacht Club, and CryptoPunks (BAYC), have suffered the greatest losses in the past few months. These losses ranged from 100% to 58%, in the most extreme cases.
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These are all reasons why traders could consider leaving altcoin markets until they find new opportunities. Bitcoin dominance may continue to rise and could return to the 2020 level of 60 percent.
$127 Million In Bitcoin And Ethereum Positions Liquidated Amid Market Drop| $127 Million In Bitcoin And Ethereum Positions Liquidated Amid Market Drop
In addition, BTC’s price could see some relief after a week of crab-like price action. On this note, economist Michaël van de Poppe saidBelow is a slightly more positive prediction about altcoins for June.
As #Bitcoin recovers this move, it is easy to predict a relief rally later in the month. Altcoins’ daily price is starting to improve. You could see a rally between 50-100%. Make sure you are ready.