With Bitcoin Dropping and Altcoins Gaining, Is the Crypto Market Less Dependent on BTC?

Bhushan Akolkar
January 5, 2022
Why Trust CoinGape
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Why Bitcoin Users Are Moving to Altcoins? As Ethereum Price Jumps 11%

While the broader cryptocurrency market has been consolidating heavily recently over the last few weeks, we have seen an interesting trend in the market. Bitcoin (BTC) continues to move sideways as its overall dominance in the crypto space drops under 40%.

On the other hand, some of the altcoins projects have been really showing strength for e.g. Terra (LUNA), Polygon (MATIC), Chainlink (LINK), avalanche (AVAX), etc. This once again brings us to the age-old debate of whether if Bitcoin is losing its grip over the markets to drive the momentum single-handedly.

If we see at the Bitcoin dominance chart below, we can clearly note that it has been on a declining trend since the beginning of 2021. In fact, the Bitcoin market dominance is reaching close to the lows of 2018.

Courtesy: Coinmarketcap

On the other hand, altcoins like Ethereum (ETH) and others have been extending their market dominance. In one of his recent tweets, popular crypto analyst Lark Davis writes:

There are actually a lot of #altcoins showing good strength in spite of #bitcoin looking sad. The more the industry grows the less impact BTC will have on alts.

The Growth of the Altcoin Market

Previously, around 2017-2018, the movement in the altcoin market was heavily dependent on the movement of Bitcoin (BTC). Meaning, Bitcoin had a heavy influence on the altcoin market rally which is now changing!

Over the last few years, we have seen some strong altcoin projects with profound blockchain technology coming to the market. Besides, the fast market expansion of decentralized finance (DeFi), DEXs and NFTs some good projects like Solana, Avalanche, etc. into the limelight.

On the other hand, we have projects like Chainlink (LINK) that solve a crucial problem of data transfers across blockchains. Then we have projects like Terra (LUNA) that address the stablecoin liquidity requirement for DeFi.

Overall, the altcoin space is expanding across key industry solutions which is why the interest in altcoins is growing with time. While many see Bitcoin (BTC) as a store of value, the altcoin projects help in tapping into new technology solutions.

Advertisement
coingape google news coingape google news
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets. 

He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.