- Bitcoin has lost nearly 60% in market cap since beginning of 2022
- Bitcoin’s dominance touched lows of 38.8%
- The last time Bitcoin market cap dominance touched similar lows was back in April 2018, at 39%
Bitcoin Dominance falls to 38.8%!
Amid the raging bear market of 2022, Bitcoin has quite undeniably been one of the poorer performers amongst the top cryptos by market cap out there. It has fallen nearly 60% from the beginning of 2022 and from a technical standpoint, things don’t seem to be too well with the king coin.
And thanks to such a devastating loss of value and market cap in such a short period of time, and coupled with the fact that other cryptos like Ethereum (ETH), Cardano (ADA), and Solana (SOL) have been developing very quickly, and rapidly eating into Bitcoin market cap – we have seen a significant fall in Bitcoin dominance too.
And as on 8 September, 2022, Bitcoin’s market cap dominance over the overall crypto market cap hit a 4 year low of 38.8%. The last time we saw this figure was back in April of 2018, when it had touched 39%, take a look. Bitcoin price rallied by 5.5% over the past 24 hours right after the speech by US Fed Chair, Jerome Powell, pushing the overall crypto market cap above the crucial psychological level of $1 trillion again. This happened pretty much in line with other asset classes as well.
This is a worrying sign for Bitcoin holders and investors, who had seen this as the king of cryptos, while good news for investors in other altcoins are growing more rapidly, both in terms of developmental activity as well as price action, and thus eating into Bitcoin dominance massively.
In retrospect, this would be a good thing for an overall market. This is because the entire crypto market relying on only one coin to lead the action, as it was back during the rally between October & November 2022 – when Bitcoin dominance had hit 47% or even as recently as June 2022, when it had crossed over 48% briefly. Back in January 2021, just before the beginning of 2021’s first bull run, Bitcoin’s market cap dominance was at a staggering 71%!
From the perspective of an open and free market flow, a 71% market cap dominance of one single coin tends to be unhealthy since price action in Bitcoin would affect other coins quite significantly, even though the reason behind the price action could be something very Bitcoin specific.
Also a recent analysis by crypto analytics firm, Glassnode pointed out that nearly 65.77% of Bitcoin’s circulating supply is dormant. This is a very strong indicator of a Bitcoin bear market and hence could point towards a further shedding of value going forward.
Additional Read: Bitcoin Price Prediction Weekly
This is equivalent to 65.77% of the circulating supply.
Increasing dormant supply is a characteristic of #Bitcoin bear markets.
— glassnode (@glassnode) September 5, 2022
However, from the perspective of overall Bitcoin investors, recent data suggests that despite the near 60% crash in Bitcoin price since the beginning of the year, 47% of all Bitcoin investors are still in profit. According to data from IntoTheBlock, about 50% of holders are seeing red on their books while 3% remain in the breakeven zone. Hence, this fact could provide some much needed price support to the overall Bitcoin price, with these ‘diamond hands’ buying into the dip and stabilize the price.
So the future for Bitcoin is yet to be seen and not etched in stone yet. Things could quickly turn around for the better, providing some relief to investors. Bitcoin is the first generation of cryptos, the grand old father of the ecosystem and is truly a beacon in the decentralised world, and hence, the future may surprise us too!
Prices as of 9th September, 2022
Additional Read: BTC Price nosedives below $19000