Many seasoned traders are likely familiar with the Bitcoin dominance chart and its data interpretation. However, it’s important to acknowledge that this data is subject to change over time, prompting a shift in our approach.
The cryptocurrency landscape is in a state of constant evolution, with new coins entering the market and existing supplies increasing due to emission schedules. This inevitably leads to a continuous rise in the market cap of these altcoins, unless token pricing adjusts to account for inflation.
Not to mention how stable coins play a significant role in the dominance chart as well, further contributing to the expanding market cap of these tokens as liquidity enters crypto and more stable coins are printed
This sustained growth in the altcoin market creates a gradual reduction in Bitcoin’s dominance over time. It’s unlikely we’ll see Bitcoin reclaiming a 70%+ dominance, given the abundance of cryptocurrencies in the market. Unless, of course, a substantial portion of altcoins face significant price drops adjusting for their inflation.
It’s worth considering these dynamics when interpreting the dominance chart, as the data may not align with historical norms.
