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Over the last week, the altcoin market has added over $500 billion taking the overall crypto market cap to above $2.5 trillion. Ethereum (ETH), Binance Coin (BNB) and Dogecoin (DOGE) have been the top performers in the crypto market while Bitcoin (BTC) has been consolidating for a long time time.
As altcoins continue to extend their market dominance, Wall Street investors are worried over Bitcoin’s falling market dominance. From over 70% at the beginning of 2021, the BTC dominance has now dropped to under 44%. Strategists at JPMorgan Chase & Co and DataTrek Research LLC calling it a warning sign reports Bloomberg.
In a note to clients last Friday, JPMorgan’s chief strategist Nikolaos Panigirtzoglou noted that Bitcoin’s waning dominance echoes “Froth”. He also noted that the current rally in the altcoin space has been driven more by retail demand.
Well, it is very much clear that Ethereum (ETH) has been continuously gaining dominance over Bitcoin (BTC) in terms of percentage returns. Earlier today, Ethereum (ETH) touched an all-time high above $4150 levels extending its year-to-date gains to a massive 480%. On the other hand, BTC’s year-to-date returns stand just over 100%. Check the below chart of how the ETH price has surged against Bitcoin.
Investors getting comfortable with Altcoins
Some of the Wall Street analysts believe that the recent top in BTC market dominance is because many investors are getting comfortable with investing in altcoins. While the latter is true, the fact remains that big investors are still interested in Bitcoin.
DataTrek’s co-founder Nicholas Colas noted that historically, Bitcoin (BTC) has bounced back pretty strongly whenever its market dominance has moved closer to 40%. He further added:
“Even if you don’t invest in the space, this is worth tracking”. He added that with more than US$2 trillion now invested in virtual currencies, “a meaningful reset lower could also affect more traditional financial assets like equities.”
We must not undermine the recent BTC price consolidation as its weakness. CryptoQuant CEO Ki-Young Ju mentions that BTC’s estimated leverage ratio has cooled off.
$BTC estimated leverage ratio seems cooled off enough. The market is not over-leveraged anymore.
All eyes on $ETH, but it will soon move to $BTC.
Chart👉 https://t.co/GhEhe1yzLl https://t.co/5kl9xuFAFU pic.twitter.com/XuLt8YH6Yd
— Ki Young Ju 주기영 (@ki_young_ju) May 10, 2021
He further noted that Bitcoin’s Exchange Whale Ratio (EWR) is still below 85% hinting that we are still in the bull market.
What now then?
EWR usually keeps below 85% these days. $BTC is still in the bull market.https://t.co/t3orEMC7sC
— Ki Young Ju 주기영 (@ki_young_ju) May 10, 2021
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