Bitcoin (BTC) market dominance escalated in March and is now reaching levels not seen since June.
The “dominance” of a crypto-asset, total cryptocurrency measures how much of the market value it constitutes. Investors use this to determine which parts of the crypto market are performing better or worse than their peers.
When Bitcoin dominance rises, it means that Bitcoin is doing well, but more specifically, it is outperforming altcoins.
Bitcoin dominance has risen steadily since March 8, the day after Silvergate Bank announced its discretionary liquidation.
It is currently at its highest level since June 10, according to TradingView.
Michael Rinko, a research analyst at Delphi Digital, said he sees this move as “totally macro-driven,” partially explaining why it’s limited to Bitcoin:
“Most of the flows go to Bitcoin as opposed to the general crypto space. This reflects a view that we are at or very near the bottom of the macro cycle.”
Rinko noted that bond yields dropped significantly as the banking crisis progressed. According to the analyst, BTC is very sensitive to global liquidity.
The Rise of Bitcoin Dominance May Be Due To BTC Becoming A Escape Point After The Banking Crisis, According to Analyst
Last Sunday, the Fed collaborated with other global central banks to ensure the availability of the dollar in order to address liquidity concerns in the financial system. Bitcoin rose 3% that day.
Rinko said that especially since the collapse of three US banks, the rhetoric that Bitcoin could be an alternative means of transferring money or storing wealth has developed. According to the analyst, this was the source of the rise of BTC dominance. Also, for the same reason, BTC outperformed other cryptocurrencies.
Economist and author of Crypto is Macro Now, Noelle Acheson, added that BTC’s rise in dominance is due in part to regulatory uncertainty plaguing other crypto-assets in the market, in addition to macro factors.
*Not investment advice.
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