Bitcoin’s dominance in the crypto market is hitting a major roadblock. Charts show it’s nearing a resistance level that’s historically caused big drops. If this pattern repeats, Bitcoin’s dominance could plummet to as low as 40% in the coming months.
Why a Bitcoin Drop Could Boost Ethereum, XRP, and Others
This time around, Bitcoin’s dominance has grown much faster than in previous cycles. This means less room for altcoins to shine. Currently, Bitcoin holds a whopping 63.2% of the market, a yearly high. But a technical analysis suggests a potential crash to 34.9%-40%.
If this happens, it could be great news for altcoins like Ethereum, XRP, and others. A drop in Bitcoin’s dominance usually means altcoins are outperforming Bitcoin, leading to price increases across the board. Established altcoins like Ethereum, XRP, Cardano, Chainlink, BNB, and Litecoin (the “DINO” coins) are likely to see early interest.
However, the crypto market is much more crowded now than in previous bull runs. Thousands of altcoins exist, so the gains might be more concentrated. We might see a shift towards niche sectors like AI, Real World Assets (RWAs), and DeFi. Even within these areas, only the strongest projects will likely thrive.
Could Bitcoin Really Fall That Far?
Bitcoin’s dominance crashing to 40% has happened before, during the 2017 and 2021 bull runs. But it might be harder this time. Spot Bitcoin ETFs are locking up a lot of Bitcoin for the long term. This means a drop in Bitcoin’s dominance might not automatically send a flood of money into altcoins like it did before.
Even with a big shift towards altcoins, many will still likely crash hard. History shows that most altcoins lose over 90% of their value once the bull market ends and investors move to safer assets.
