Bitcoin dominance rises to its highest level since October 2021, and Ethereum is still weak
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Answer Bitcoin dominance rises to its highest level since October 2021, and Ethereum is still weak
Earlier today, Bitcoin’s dominance surged above 47% for the first time since October 20, 2021.
The cryptocurrency king tends to increase his market share through major market corrections due to the growing sense of risk aversion and the search for old and reliable assets.
Bitcoin is seen as a safer bet compared to altcoins like ethereum (not to mention more obscure altcoins).
Jeroen Blokland, founder of True Insights, believes that the recent rise in Bitcoin dominance has been driven by the collapse of Terra and the latter’s Solana network, which suffered its second outage in a month.
The greater flexibility of the cryptocurrency allowed it to control a larger market share.
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In fact, Bitcoin’s market share has risen over 12% since the collapse of the UST algorithmic stablecoin project in May.
In early 2021, bitcoin’s market dominance was up 71% after the leading cryptocurrency started outperforming and broke the downside in late 2020 by smashing its previous peak of $20,000.
In February, Ethereum and Dogecoin stole the spotlight in the first quarter of 2021, and Bitcoin remained in the shadow of Solana, Terra, and other projects for the remainder of the year.
Usually Bitcoin tends to regain its popularity during bearish corrections.
Aside from being considered a relatively safe bet compared to altcoins, Bitcoin also has the highest level of liquidity.
Because of their tight order books, their price movements are smaller, which is why they decline more slowly than alternative cryptocurrencies.
Earlier, the market share of the largest cryptocurrency fell to an all-time low of 35.41%, but then rebounded to 62% in late 2018.
Now that the crypto winter that is starting to scare traders is back, Bitcoin’s dominance is likely to continue to rise unless there is a major market reversal.
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