- Bitcoin is close to achieving the same market dominance that it reached following the 2017 bull run.
- It demonstrates a rising interest in Bitcoin over altcoin competitors.
- Bullish sentiment due to recent performance ahead of the Bitcoin halving could be partly responsible for this unexpected spike.
Bitcoin is once again silencing its critics, skyrocketing up the price charts, and smashing altcoins in its wake.
According to data shared by Messari researcher Ryan Watkins, Bitcoin is close to achieving the same market dominance that it reached following the 2017 bull run.
Bitcoin’s “dominance rate” essentially indicates Bitcoin’s current share of the total market cap for crypto. A high dominance rate demonstrates that investors find Bitcoin more attractive right now than all other crypto competitors combined. And traders are putting their money where their mouths are.
Bitcoin Dominance approaching post 2017 highs. pic.twitter.com/Owl73Y6DxL
— Ryan Watkins (@RyanWatkins_) April 30, 2020
For perspective, Bitcoin began to lose its dominance over the crypto market in 2018 as a result of a sharp price crash. Its popularity fell as traders moved to altcoins hoping to diversify their investment in crypto and hedge their risks. But as Bitcoin recovers, so does its dominance.
What’s notable, however, is the speed at which this indicator has increased over the past few days. The growth has been dramatic and beyond what the market has come to consider as normal. Data from crypto analytics firm Messari shows that such an increase in interest has not been witnessed since the days when Bitcoin was close to reaching its all-time-high price.
And while crypto markets are unpredictable, and often the market just does what markets do, there are two possible reasons for the spike in Bitcoin dominance:
On a fundamental level, it's impossible to ignore the fact that the third Bitcoin halving is just around the corner. In less that two weeks, Bitcoin’s inflation rate will be reduced by 50%, since mining rewards will be cut in half and the rate at which Bitcoins enter the market will be slowed by the same measure.
12 days left until next #BitcoinHalving
— Bitcoin Halving Countdown (@Bitcoin_Halving) April 30, 2020
Many analysts believe that the Bitcoin halving will lead to a bull run as demand adapts to this sudden reduction in supply, and so traders could be moving from altcoins to Bitcoin in anticipation of this event.
On a technical level, yesterday was a dream day for hodlers and traders. After the slump in prices that followed last month's panic episode, Bitcoin had a phenomenal recovery, rising over $1,000 in price in just one week and 15% in the last 24 hours. This jump overshadowed the performance of many altcoins, so it’s also possible that Bitcoin caught the attention of day traders who had been previously waiting for that much-desired “alt season.”
Whatever the reason, one thing is for certain: the Bitcoin bull vibes are back.