A well-known cryptocurrency analyst is skeptical that Bitcoin’s dominance will return to its December 2020 levels, before the asset saw a roughly 220% surge within three months.
“I don’t think it’s going back up to 70%, my target for Bitcoin dominance has been 60%,” said Benjamin Cowen, founder of Into The Cryptoverse, during an interview on The David Lin Report on August 17.
Analyst skeptical of Bitcoin dominance returning to previous cycle highs
Cowen expressed doubt that Bitcoin dominance would reach its previous cycle highs, explaining that during major “altcoin seasons” like the one in 2021, Bitcoin’s market dominance typically decreases but eventually slowly recovers after a downturn. However, this time around, he is more certain that Bitcoin won’t reach its past dominance peak.
“I think there’s room for Ethereum and many other cryptocurrencies,” Cowen added. He anticipates that Bitcoin could make its final move towards 60% dominance between September and December of this year. As of now, Bitcoin’s dominance stands at 57.36%, an increase of 4.25% since July 18, according to TradingView data.
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However, another pseudonymous crypto trader, Kaleo, recently informed their 643,700 followers on X that Bitcoin dominance may have already peaked.
“I feel fairly confident this is the cycle top for Bitcoin Dominance,” Kaleo posted on August 9 when Bitcoin dominance was around 57.50%.
“Didn’t quite hit the 60% I was expecting—which is a good thing because that would have been painful,” Kaleo remarked, adding that “the real” altcoin season begins when Bitcoin dominance drops below 50%.
Traders often watch for signs of Bitcoin dominance peaking as an indicator to sell Bitcoin and shift investments into altcoins.
The landscape for Bitcoin dominance is different this cycle
In December 2020, Bitcoin dominance hit 70.23% before its price surged to $61,283 in March 2021, according to CoinMarketCap data.
Cowen pointed out that Bitcoin dominance is “trickier” in 2024 compared to 2019, when it peaked slightly above 71%, due to the significantly lower stablecoin market capitalization at that time.
He advises combining Bitcoin dominance with the dominance of the stablecoin Tether (USDT) to calculate what he calls “flight to safety dominance.”
In the August 17 interview, Cowen noted that the combined dominance of Bitcoin and USDT currently stands at about 63%, a level similar to that in June 2019, just before the U.S. The Federal Reserve cut interest rates.
At present, the combined dominance of USDT and Bitcoin is 63.07%.
Cre: cointelegraph.
I’m Jessi Lee, currently living in Singapore. I am currently working as a trader for AZCoin company, with 5 years of experience in the cryptocurrency market, I hope to bring you useful information and knowledge about virtual currency investment.
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