There’s a buzz in the cryptosphere today. Bitcoin dominance hasn’t been this low since last August. Google trends show that interest in Bitcoin hasn’t been this low since last April. Are we in the quiet before the storm or status quo?
Dominance is hovering just above 50%. A result of “alt season,” money rapidly flowing into altcoins and a relatively stagnant Bitcoin price conspire to lower the actual position of Bitcoin. But not by much. Bitcoin’s market capitalization can still fit hundreds of other cryptos within it.
This Isn’t 2015 or 2017 – The Market Is Far More Crowded
Some in the space have noted that a lower dominance preceded a major bull run in the past. Others have noted that the rise and fall of Bitcoin very nearly charts with the first major bull run, in which Bitcoin soared to $1,000 and then dumped below $100.
One thing left out of that analysis is the petulant effect of Mt. Gox. It’s reasonable to blame the first major crash on the failure of Mt. Gox. Being the major Bitcoin exchange, its collapse scared investors. Subtract that, and it’s unclear whether the crash would have happened at all.
In the last bull run, however, we don’t have things like that. There’s no single catalyst that can be blamed for the sell-offs. Interest began to wane. Double digit percentage drops pushed new investors to dump. There is no data to suggest that such investors will come back.
Where Will The Money Come From This Time?
In one respect, it’s a sign of virtue that Bitcoin scares away those wealth seekers. It’s difficult to stay invested in the space unless you have a philosophical distrust of the fiat system as part of your core principals.
The bull run up to $20,000 was one of the few price movements that got some long-term hodlers to move their funds. Some have reportedly bought back in at lower prices. The average daily price of Bitcoin is largely dictated by less than half of the coin supply.