TLDR
Bitcoin dominance reaches 58.9%, a cycle high not seen since April 2021
Bitcoin price nears $70,000, rising 10% in the past week
Total crypto market cap increases to $2.41 trillion, largely due to Bitcoin’s performance
ETH/BTC ratio at 0.0385, lowest since April 2021, indicating weak Ethereum performance
DeFi TVL drops from $110 billion to $88 billion, showing reduced demand for altcoins
Bitcoin’s dominance in the cryptocurrency market has reached a new cycle high of 58.9%, a level not seen since April 2021.
This surge comes as Bitcoin’s price approaches $70,000, having risen by almost 10% in the past week to trade at $67,769.
The increase in Bitcoin dominance has raised questions about the prospects of an “altcoin season” and the overall health of the broader cryptocurrency market.
The total cryptocurrency market capitalization has grown from $2.26 trillion on October 8 to $2.41 trillion on October 16, according to data from CoinGecko.
However, this growth is primarily attributed to Bitcoin’s strong performance rather than a collective rise across all cryptocurrencies.
Bitcoin dominance, a metric that measures Bitcoin’s share of the total cryptocurrency market cap, has increased by approximately 1.8% since the beginning of October.
This rise showcases Bitcoin’s strength relative to altcoins such as Ethereum, Solana, and Binance Coin.
The current level of Bitcoin dominance has cast doubt on the likelihood of an imminent altcoin season, which is typically characterized by significant price increases in alternative cryptocurrencies and a decline in Bitcoin’s market share.
Historically, Bitcoin dominance peaked at 70% during the post-COVID bull market in 2020-2021 before dropping to 40% by mid-2021.
It reached its lowest point of around 39% in late 2022 amid the collapse of FTX, a major cryptocurrency exchange that ceased operations due to fraud charges against its leadership. Since then, Bitcoin dominance has been on a gradual upward trajectory.
The ETH/BTC trading pair, which tracks Ethereum’s performance against Bitcoin, currently stands at 0.0385, a level last observed in April 2021.
This ratio has failed to establish a higher high against Bitcoin since at least November 2022, reflecting weak Ethereum price action over the past two years.
A strong Ethereum performance against Bitcoin often precedes an altcoin season, but there are currently no clear signs of a meaningful trend reversal.
Further indicating weak demand for altcoins, the total value locked (TVL) in decentralized finance (DeFi) protocols across all blockchains has decreased from nearly $110 billion in June 2024 to $88 billion.
This decline suggests that crypto investors are showing less interest in altcoin-based DeFi projects.
Despite these indicators, some crypto analysts and technical indicators still suggest that an altcoin season may be on the horizon.
Earlier this month, the altcoin market cap surpassed its 200-day exponential moving average (EMA), a key resistance level that signals strong altcoin performance in recent days.
