Bitcoin dominance is on the rise once again, nearing a near 50% high, as investors exhibit a strong preference for Bitcoin over other cryptocurrencies.
Recent data from TradingView reveals that Bitcoin’s market capitalization as a percentage of the total cryptocurrency market cap has increased by 4.1% in the past week, reaching levels not seen since April 2021.
This trend of increased Bitcoin dominance is reminiscent of the prolonged bear market experienced between 2018 and 2022. During bear markets, investors tend to gravitate towards the stability offered by Bitcoin compared to other altcoins.
The recent surge in Bitcoin dominance can be attributed, at least in part, to the underperformance of major altcoins following the Securities and Exchange Commission’s (SEC) lawsuits against industry giants Binance and Coinbase.
While Bitcoin has experienced a 3.6% drop over the past seven days, it has fared relatively better than major altcoins like Ethereum and BNB, which have witnessed declines of 7.0% and 25.5% respectively, according to CoinGecko data.
During market downturns, Bitcoin’s stability becomes particularly appealing to investors seeking a safe haven. As the primary cryptocurrency, Bitcoin has historically demonstrated resilience during bear markets, attracting investors who view it as a relatively secure store of value compared to other volatile altcoins. This perceived stability has contributed to Bitcoin’s increased dominance in the current market.
The recent turbulence in the cryptocurrency market has taken a toll on altcoins. Major altcoins such as Cardano (ADA), Binance’s BNB, and Dogecoin (DOGE) have experienced significant price drops, reflecting the broader market sentiment. Investors have shown a preference for Bitcoin’s relative stability, causing altcoins to suffer more pronounced declines.