Bitcoin dominance is once again reaching a near 50% high, echoing the trend seen during the prolonged bear market between 2018 and 2022, per data provided by TradingView.
"Bitcoin dominance" refers to Bitcoin's market capitalization as a percentage of the total cryptocurrency market cap.
A high dominance index reflects investor preference for Bitcoin over other cryptocurrencies. Bitcoin dominance has witnessed a considerable increase of 4.1% over the past week, reaching the highest level since April 2021.
Historically, the dominance of Bitcoin typically increases during bear markets. The primary reason behind this trend is the relative stability that Bitcoin offers in contrast to altcoins, a trait particularly appealing during market downturns.
The recent shift in Bitcoin's dominance can be partially attributed to the underperformance of major altcoins, following the SEC's lawsuits against cryptocurrency giants Binance and Coinbase.In the aftermath of these events, Bitcoin has managed to retain its relative stability, while altcoins have seen a significant plunge.
Bitcoin, despite a 3.6% drop over the last seven days, has largely outperformed major altcoins such as Ethereum and BNB, which suffered 7.0% and 25.5% declines, respectively, according to CoinGecko data.
Other altcoins, such as Cardano (ADA), Binance's BNB and Dogecoin (DOGE), have also seen dramatic drops.
Amid the market turbulence, the spotlight has returned to the original cryptocurrency and its dominating status on the market.