Bitcoin Dominance Nears Two-Year High But Prices Retreat
Bitcoin and crypto markets are in retreat today, but BTC dominance has been climbing. This combination spells bad news for altcoins and any hopes of altseason soon.
Bitcoin dominance returned to a two-year high over the weekend. The metric, which measures Bitcoin’s market share compared with every other crypto asset, reached 48.77% on April 30, according to Tradingview.
Furthermore, it came just below 49% on April 12 but retreated soon after catalyzing speculation of an ‘alt season.’
Bitcoin Dominance Eats Altcoins
The strengthening of Bitcoin dominance suggests that those hopes of an altcoin revival may have been premature.
However, the metric has taken a slight hit today as BTC prices fall back.
Since the beginning of the year, BTC dominance has increased by around 15%. It is currently at 48.29% after gaining 2.2% over the past week.
On May 1, crypto trader ‘@DrProfitCrypto’ urged caution over altcoins following the rise in BTC dominance.
He noted that the weekly dominance candle has closed above resistance, adding, “This should be the first warn sign.”
“If the dominance that rose today continues to pump, and BTC decides to dump. You can prepare for an altcoin season in other way, a massacre like rarely seen before.”
The trader and analyst also proposed a couple of scenarios that would be bad for altcoins. These are gains for BTC dominance and prices and gains for market share but a price decline. This appears to be the current situation.
Altcoins are only likely to benefit if BTC prices increase but dominance declines.
On May 1, crypto trader ‘@SatoshiFlipper’ said that Bitcoin bears could be strengthening. He noted that BTC prices had hovered around $28,000 for more than a month, failing to break resistance above $30,000.
“Until 30k is support, there is nothing for BTC bulls to get so emotionally excited about.”
At the time of writing, BTC was trading down 2.4% on the day at $28,529, according to BeInCrypto markets data.
Greed Still Abundant
However, the Bitcoin fear and greed index is still flashing a ‘green’ signal at 63. Sentiment for the asset is still positive despite it falling almost 8% from its 2023 high in mid-April.
Satoshi Flipper went on to comment on the memecoin madness suggesting that it was a signal that the rally had reached a top.
“When ya’ll start pumping meme coins, it’s typically a solid top signal. Just wish $BTC was at least 40k before half this place started losing their minds over pepes & bobs.”
Crypto markets had retreated 1.8% on the day at the time of writing.
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