Retail Surge Sparks Bearish Outlook As Bitcoin Dominance Declines
24 Outubro 2024 - 1:00PM
NEWSBTC
The cryptocurrency market’s recent dominance by Bitcoin has
decreased below 50%, indicating a potential adverse trend as retail
activity increases. This change prompts inquiries regarding market
dynamics and investor sentiment. Bitcoin’s dominance has been a
critical indicator of whether the market is in a bull or negative
cycle throughout history. As Bitcoin’s dominance is growing,
usually, it means a defensive market where investors would prefer
the relatively safer alternative of Bitcoin rather than altcoins.
Related Reading: Bitcoin ETF Inflow Streak Breaks With Nearly $80
Million Outflows In Sudden Reversal Whereas a fall usually means
the investor is likely to increase his risk and very often prefers
to invest in altcoins for possible higher returns. Crypto analyst
Alan Santana identified three significant warning signals for
Bitcoin’s dominance in an X post on Tuesday, as retail investors
resumed trading after an extended period of inactivity.
#BTCdominance 🅱️ 3 Bitcoin Dominance Bearish Signals + Fibonacci
Time Calculations I would like to show here mainly three signals
that can be considered bearish on this chart, Bitcoin Dominance
(BTC.D). 1) There is a Doji on the 16th of September. Coming at the
top of a trend… pic.twitter.com/enQAeVo5MB — Alan Santana
(@lamatrades1111) October 21, 2024 The Increase In Retail Activity
As Bitcoin’s supremacy wanes, retail investors are getting
increasingly active. Usually, this rise in retail involvement comes
with a decline in Bitcoin’s market share since these investors
transfer to altcoins in search of better earnings. The current
situation is reminiscent of previous cycles, during which the
increase in retail interest resulted in a substantial decrease in
Bitcoin’s dominance. For example, Bitcoin’s dominance declined
significantly during the 2021 bull market as new altcoins gained
momentum, diverting attention from the original cryptocurrency.
General Shift In Investor Mood Market experts say that this trend
isn’t just a one-time thing; it’s a sign of larger changes in how
investors act. As non-fungible tokens (NFTs) and decentralized
finance (DeFi) have grown, altcoins have become more appealing. A
lot of investors think that networks like Ethereum, which support
smart contracts and decentralized apps, are more flexible than
Bitcoin these days. This change could be a sign of a bigger shift
in how people think about and use cryptocurrencies. Related
Reading: 5 Million Strong: Active Ethereum Wallets Drive Strong
Momentum Fluctuation Trends Bitcoin has seen a trend of
fluctuations in dominance since its inception in 2009. Starting
with an almost 100% market share, it began to decline slowly with
the introduction of more altcoins. Bitcoin fell crucially during
both the ICO boom of 2017 and the DeFi surge of 2021, at which time
it fell to below 40% dominance. Given such historical precedents,
this might represent another such phase where altcoins do
outperform Bitcoin, especially when retail interest is growing.
Experts believe that this can cause the crypto markets to become
even more volatile in the future if this continues. Declines in
dominance are often precursors to speculative trading, which
subsequently causes prices of both Bitcoin and altcoins to
fluctuate wildly. The current level of Bitcoin dominance functions
as a gauge of the general market sentiment. Many speculators are
reassessing their strategies as it continues to decline. Featured
image using Dall.E, chart from TradingView
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