TL;DR Breakdown
- 2017 crypto rally could repeat.
- Bitcoin dominance in the market.
In 2017 the price of the world’s most popular and most valuable digital currency dropped by 65%. Bitcoin’s most recent drop marked a historic drop in the price of the largest virtual currency (BTC).
The most valuable digital asset patterns shown this month are similar to those that occurred back in 2017, where the entire crypto market was in losses. The question that we should ask ourselves is, “what does this trend suggest for the price of the giant virtual asset Bitcoin?”
Bitcoin patterns are similar patterns that occurred back in 2017 when most virtual currencies dropped in prices. There is a possibility that the 2017 crypto rally could be repeated.
BTC dominance
The crypto sphere had recorded mass losses from the 12th of this month when the cryptocurrency market crashed. BTC dominance has had a sharp downtrend. At the beginning of this year, the dominance of the world’s largest virtual currency was about 70%; however, it was 40% before the recent market crash. The 40% dominance is the lowest since 2018, when it was at its lowest. However it has recovered, and now it is at 43%.
If the same trend is in progress, it means that it is similar to the market of 2017 summer when the digital currencies market recorded a massive surge, and still, some few months to go from when the most prominent digital currency recorded a peak of around $20k in the last month of 2017.
Even though similar characteristics have been witnessed in the two years, the dominance of the giant currency does not tell much about the price. However, it gives insight into how the popular currency is performing in relation to the rest of the market, underpinning some trends. The question is ‘ what does bitcoin dominance mean to the market.
The unknown quantity
What is different between this year and 2017 is that today institutions have been put in place in the markets that were not there back then. At least, that’s true for Bitcoin and, to some extent, large-cap altcoins such as Ether (ETH). Large swathes of the alt markets, including almost all low-cap coins and meme coins like Dogecoin (DOGE), are dominated by retail traders and investors.
While taking a close eye on the market dominance chart, the most prominent digital asset seems to have been boosted at the end of last year when many institutions used bitcoin. The rise of Bitcoin dominance went on rising until January this year.
There have been beliefs that institutions have boosted Bitcoin’s dominance. On the 21st of May, it came up that whales had bought $5.5 billion worth of BTC even though the asset price was below $36,000.
So, there’s a chance that Bitcoin’s sudden dominance recovery may not come down to regular market cycles but instead, be influenced by institutional whales scooping up discounted BTC.
