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Bitcoin Dominance Could Hit Rare Highs, Says Analyst

2 mins
Updated by Adam James
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Since its inception, Bitcoin has always had the highest market capitalization out of all cryptocurrencies. Furthermore, its total market capitalization has very often been higher than that of all other cryptocurrencies combined. This has been the case since August 2018.
At the current time, Bitcoin’s dominance rate stands at 68.75 percent. It is possible that it will do another rapid increase, reaching 75-80 percent by January 2020. This, however, is conditional on BTC making another rapid move. If Bitcoin continues to consolidate, the dominance rate is likely to decrease. Cryptocurrency trader @galaxybtc stated that the Bitcoin market dominance has been increasing for a significant period of time and predicted a dominance rate of 75-80 percent by year’s end. Additionally, he outlined three descending resistance lines that share similarities and all led to breakouts. At the current time, BTC is following one such resistance line. Will we again see a breakout and move towards 75-80 percent? Let’s analyze.

Descending Wedge

Looking closer at the Bitcoin price movement, we can see that, besides the descending resistance line, the current support line creates a descending wedge — which is a bullish pattern. BTC Market Cap Dominance Combined with the bullish divergence in the RSI, this makes a breakout likely. Therefore, the “75-80 percent by year’s end” prediction does not seem far fetched. However, since the dominance is not actually traded in an exchange, we want to look at the relationship between the price of Bitcoin and its dominance.

The Relationship Between Bitcoin Price and Dominance

As we can see in the image below, the Bitcoin dominance increases whenever the Bitcoin price (orange) makes a new high. Additionally, it sometimes increases even when the price makes a new low — as is visible by the red vertical line. Bitcoin Dominance Comparison However, when the Bitcoin price is consolidating, the dominance rate decreases. This is understandable since investors looking to make profits will transfer their funds from BTC to alternate coins. Since we believe that Bitcoin is likely to do one final downward move, it makes sense that the dominance rate will do one final push before beginning to decrease. Therefore, the 75-80 percent prediction could be validated by the end of the year. Do you think the dominance rate will reach 75 percent by year’s end? Let us know in the comments below. 
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.  Images are courtesy of Shutterstock, TradingView.
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Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

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Valdrin Tahiri
Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona School of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst. (I do not have a discord and will not contact you first there. Beware of scammers)
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