On-chain data revealed that Bitcoin’s dominance has steadily risen since 2022. It also highlighted that Bitcoin’s active users’ market share has declined over time. The data indicated increased on-chain activity in Ethereum and other Layer 1(L1) networks.
Onchain data indicated that Bitcoin’s dominance has increased since 2022, and the uptrend was the longest in history. The data also revealed that Bitcoin’s active user market share declined as on-chain activity on the Ethereum network increased.
Bitcoin dominance increases amid active user decline
Matrixport revealed that Bitcoin dominance increased to a new high of over 61%. The analytics platform attributed the increased dominance to the stronger-than-expected U.S. jobs report. it said increased job rates suggested the economy was recovering.
Bitcoin Dominance Hits New Cycle High 🚀
BTC dominance has surged past 61%! 📈 Driven by a strong U.S. jobs report & the Fed’s hawkish stance, investors are shifting from alts to BTC amid tighter liquidity. Will this trend continue? 🤔 #Bitcoin #Crypto #BTC #Fed #Markets
— Cryptoville (@Cryptov1lle) March 12, 2025
The platform noted that a well-performing economy translated to increased interest rates and delays in rate cuts. It added that higher interest rates made borrowing more expensive, fueling shifts from altcoins to safer assets like Bitcoin.
Historically, Bitcoin’s dominance increased when there were market uncertainties. Onchain data revealed that Bitcoin dominance was at 60.3% on November 5 and fell to 53.9% on December 9. The drop resulted from increased on-chain altcoin network activity after the November U.S. elections.
The data also indicated Bitcoin’s dominance declined as the total market cap increased in the November altcoin rally. It also highlighted that BTC regained market dominance in March amid the market uncertainties fueled by Trump’s trade tariffs.
Etherscan data revealed that Ethereum’s active user base increased by over 15% in the past 6 months to 3.2 million daily active addresses. The increase in chain activity highlighted a divergence between market dominance and usage within the crypto ecosystem.
Coingecko data highlighted that Bitcoin recorded a 2.5% price increase in 24 hours. It indicated that increased trading volumes accompanied the price surge on major exchanges by up to 10% in the past month.
Tradingview data revealed that the BTC/USDT trading pair recorded the highest volume, with over $18 billion traded in the past 24 hours. The BTC/ETH trading pair also recorded an increased volume of $5.4 billion.
Matrixport analysts observed that Bitcoin price correction aligned with the declining market cap. They suggested that the reduced liquidity in the crypto market continued to weigh on its price. The analysts highlighted that given the Federal Reserve’s hawkish stance on interest rates, it would be difficult for BTC to maintain its price surges based on liquidity. They noted that investors will require more patience to make further gains on BTC.
Cryptoquant suggested the increased BTC dominance and trading volumes resulted from bullish sentiments among traders as they anticipated the upcoming halving events. The decline in active users on Bitcoin signalled investors’ shift in focus to other assets with higher utility, such as Ethereum.
Altcoins register price declines despite increased on-chain activity
Altcoins continue to suffer significant price declines despite the increased on-chain activity. Coinmarketcap data revealed Ethereum has lost almost 50% of its value since December. The data indicated Ethereum plunged below the $2000 mark this month. SOL also registered a 39% decline in the past month amid global market uncertainties.
Tradingview data revealed the altcoin total market cap was $1.46 trillion by the end of January. However, it plunged to $1 trillion in March, marking an over 30% decline in two months. Investors raised concerns over increased BTC dominance, saying it created a bottleneck for altcoins, preventing capital from flowing to them.
Solana registered $102.4 billion in trading volume in February despite the memecoin crash. On-chain data revealed a 60% decline from the previous month. The reduced volumes coincided with the LIBRA fiasco that affected memecoins across the board.
According to Blockworks data,memecoins comprised over $206 billion of Solana’s January monthly trading volume. The meme coin trading volume fell in February after investors lost their investments through LIBRA. The fiasco led to negative market sentiments that reduced trading volumes on the Solana network.
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