While the cryptocurrency market in general has been consolidating strongly recently for the past few weeks, we have seen an interesting trend in the market. Bitcoin (BTC) continues to move sideways as its overall dominance in the crypto space falls below 40%.
On the other hand, some of the altcoin projects have really shown strength for e.g. Terra (LUNA), Polygon (MATIC), Chainlink (LINK), avalanche (AVAX), etc. This once again brings us to the historical debate. of whether Bitcoin is losing its grip on the markets to drive momentum singlehandedly.
If we look at the Bitcoin dominance chart below, we can clearly notice that it has been on a downtrend since early 2021. In fact, Bitcoin's market dominance is approaching the 2018 lows.
On the other hand, altcoins like Ethereum (ETH) and others have been expanding their dominance of the market. In one of his recent tweets, popular crypto analyst Lark Davis writes:
Actually, there are many #altcoins showing good strength despite #bitcoin looking sad. The more the industry grows, the less impact BTC will have on the alts.
The growth of the altcoin market
Previously, around 2017-2018, the movement in the altcoin market was highly dependent on the movement of Bitcoin (BTC). Namely, Bitcoin had a great influence on the altcoin market rally, which is now changing!
In recent years, we have seen some solid altcoin projects with deep blockchain technology hit the market. Also, the rapid expansion of the decentralized finance market (DeFi), DEX and NFT, some good projects like Solana, Avalanche, etc. in the spotlight.
On the other hand, we have projects like Chainlink (LINK) that solve a crucial problem of data transfers through blockchains. Then we have projects like Terra (LUNA) that address the stablecoin liquidity requirement for DeFi.
Overall, the altcoin space is expanding through key industry solutions, so interest in altcoins is growing over time. While many see Bitcoin (BTC) as a store of value, altcoin projects help take advantage of new technology solutions.
Disclaimer
The content presented may include the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication has no responsibility for your personal financial loss.
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