Bitcoin dominance nears two-year high, but prices pull back
Bitcoin and crypto markets are in retreat today, but BTC dominance has increased. This combination spells bad news for altcoins and any hope of an alt season soon.
Bitcoin dominance returned to a two-year high over the weekend. The metric, which measures Bitcoin’s market share compared to every other crypto asset, reached 48.77% on April 30, according to Tradingview.
Furthermore, it came in just below 49% on April 12, but retreated shortly after catalyzing speculation of an “alt season.”
Bitcoin dominance eats altcoins
The strengthening of Bitcoin dominance suggests that these hopes for an altcoin revival may have been premature.
However, the calculation has taken a small hit today as BTC prices fall back.
Since the beginning of the year, BTC dominance has increased by around 15%. It is currently at 48.29% after gaining 2.2% in the last week.
On May 1, crypto trader ‘@DrProfitCrypto’ urged caution on altcoins following the rise in BTC dominance.
He noted that the weekly dominance candle has closed above resistance, adding: “This should be the first warning sign.”
“If the dominance that rose today continues to pump, and BTC decides to dump. You can prepare for an altcoin season in a different way, a massacre rarely seen before.”
The trader and analyst also suggested a couple of scenarios that would be bad for altcoins. These are gains for BTC dominance and prices and gains for market share but a price decline. This seems to be the current situation.
Altcoins are only likely to benefit if BTC prices rise but their dominance wanes.
May 1, crypto trader ‘@SatoshiFlipper’ so that Bitcoin bears may strengthen. He noted that BTC prices had hovered around $28,000 for more than a month, failing to break resistance above $30,000.
“Until 30k is support, there is nothing for BTC bulls to get so emotionally excited about.”
At the time of writing, BTC was trading down 2.4% on the day at $28,529, according to BeInCrypto market data.
Greed still abundant
However, the Bitcoin Fear and Greed Index is still flashing a “green” signal at 63. Sentiment for the asset remains positive despite falling nearly 8% from its 2023 high in mid-April.
Satoshi Flipper continued with comment on the memecoin craze that suggested it was a signal that the rally had peaked.
“When you start pumping meme coins, it’s usually a solid top signal. Just wish $BTC was at least 40k before half this place started losing their minds over pepes & bobs.”
Crypto markets had retreated 1.8% on the day at the time of writing.
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