Bitcoin has been surging in the past few weeks to consecutive yearly highs. Speculations emerged within the community if or when BTC will even surpass its 2017 ATH of nearly $20,000.
At the same time, though, most alternative coins seemed to be dragging behind their leader. Bitcoin’s dominance highlights this – a metric that surged by nearly 7% in less than a month.
As such, it would be compelling to follow how altcoins have performed in relation to Bitcoin before, during, and after a BTC bull run.
History Lesson #1: The Summer Of 2017
Bitcoin’s dominance is arguably the most accurate measuring tool when comparing the price performances of BTC and all other cryptocurrencies. The metric was above 75% for years until it finally broke below that level in mid-2017. This was the first prime example of an altseason in the “modern history” of the cryptocurrency industry.
Although Bitcoin wasn’t exactly plummeting in value as it traded above $2,000, most altcoins were skyrocketing and, consequently, reducing BTC’s dominance. Ethereum led the charge with a 5,000% YTD increase to June 2017. This resulted in the closest difference between the market capitalizations of BTC and ETH.
The infamous bear market took over, and most prices plummeted by the end of 2018. However, BTC’s percentage decline was significantly less harmful than the alts’. As such, Bitcoin increased its dominance to about 55%.
The subsequent retracement hurt the altcoins the most again, and their market share kept declining. Bitcoin’s dominance surged to 70% in September 2019 – the highest level in over two years.
Then came the turbulent 2020. The COVID-19outbreak rattled all financial markets, including the cryptocurrency field. No asset was exempt from extreme volatility, especially in the first half of the year.
When the dust began to settle, and the markets returned to previous levels, the crypto industry saw the birth of another craze – DeFi. Unfamiliar to this period terms like “yield farming” took the stage by storm. New decentralizedfinance projects and tokens started popping up daily.
They attracted significant attention, which ultimately boosted prices. On some occasions, even triple-digit daily pumps seemed normal.
Similarly to the ICO era, most decentralizedfinance protocols employed the Ethereum blockchain. Naturally, the ETHtoken followed the trend, broke its 2019 high, and jumped above $400.
While the altcoins were marching higher, Bitcoin remained relatively steady and traded around $10,000 for an extended period, especially in September. However, as BTC saw its dominance declining, the asset decided to act.
Whether the reason was massive companies purchasing bitcoins, increased institutional interest, or repeating trading cycles, the largest digital asset went on a roll. Precisely a month ago, on October 6th, BTC sat at $10,500.
In the following weeks, BTC gained over $5,000 of value resulting in a new record since January 2018 of about $16,000. The dominance went back to 65% as most altcoins were left far behind.
The data described above aims to shed some light on the cryptocurrencymarket cycles. It exemplifies how rapidly the situation can change within the industry.
Although the altcoins may not be booming as much as some expect, it doesn’t mean that the trend couldn’t reverse soon, and the “altseason” word starts spreading around again.
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