After a consistent drop in the overall market dominance in the last 11 months, BTC has seen a sharp decline in its crypto market dominance during December’s correction. With a market cap of $930 billion, Bitcoin is still the most valuable digital asset, but on December 9, its dominance stood at around 37.2%, which is an enormous decline compared to 70% in December 2020.
Bitcoin price slid below $50,000 again and currently trading at $49,541, however, the market dominance of the top cryptocurrency dropped to a near four-year low. BTC dominance fell to 37.2% which is the lowest since February 2018, as per Coingecko data. This is the biggest plunge for the top cryptocurrency in a bull market.
During the mid-year market crash in May-June, BTC flirted closely with the 40% mark and was on the verge of tipping below, but managed to make a recovery when the bulls arrived again. However, the BTC dominance had recovered above 40% at the time of writing and was at 40.42%.
Retail and institutional interest in altcoins has played an essential role in BTC’s sinking market dominance. Binance Coin (BNB), Cardano (ADA), Solana (SOL), SHIB, and DOGE are up substantially this year, compared to Bitcoin’s 70% jump.
The alt-season often comes after a massive BTC rally, and if we compare to the 2017 bull run, the alt-season arrived in 2018 after BTC hit its all-time high of near $20,000 by the end of December 2017.
Paolo Ardoino, CTO at Bitfinex, commented on the latest crypto market correction and the sentiment around Bitcoin.
“Fear has gripped the digital token space amid speculation that we might still see further falls in the bitcoin price. While the speculative nature of the ecosystem remains front and center in the headspace of many participants, huge leaps have been made in the underlying infrastructure and payment processes,” he said, noting:
“The Lightning Network arguably represents DeFi in its truest form. Unlike many of the non-bitcoin chains that often have a speculative component based upon the appreciation of a protocol’s token, the Lightning Network is all about payments and building services.”
Crypto experts predicted a bullish Q4 2021 and gave a BTC price target of nearly $100,000. However, at the start of the month, a major flash crash saw the whole crypto market lose almost 20% of its market share, and all price targets went out of the window. Ethereum (ETH) showed the fastest recovery, especially against BTC.
The ETH/BTC pair hit the highest of 0.156 in 2017, and it is currently short by 50% from that level, but looking at the declining BTC dominance, the pair could eye reaching the high point in the coming months. Other major altcoins have recovered from the December first week flash crash and are looking set to build a rally.