Crypto-asset markets haven’t experienced a consistent “altcoin season” in more than a year, but a big decline in Bitcoin’s market share and mounting financial pressure on miners may change that. For those unaware, Bitcoin dominance is the proportion of the entire cryptocurrency market capitalization that Bitcoin makes up.
The market capitalization of all cryptocurrencies is divided by the market capitalization of Bitcoin to determine the Bitcoin Dominance Index. Due to the emergence of new altcoins that are not just Bitcoin copies, BTC’s dominance has decreased to 41.73 percent.
The easiest way to determine an altcoin season is to look at the Bitcoin Dominance Index chart, which shows how big a portion of Bitcoin’s total value (market capitalization) is compared to the rest of the crypto market. Consider the scenario when the Bitcoin Dominance Index is 41.73 percent. It shows that of the entire market valuation of all cryptocurrencies, Bitcoin represents 41.73 percent.
Bitcoin’s market share increases with all other coins when the index increases. A drop in the index suggests the opposite. Likewise, a sudden drop in Bitcoin’s supremacy over weeks or months is known as an altcoin season.
The world’s most popular cryptocurrency, Bitcoin, has decreased by 74.5 percent from its record high of $69,119 to $17,573 in the current context. Bitcoin is trading close to a multi-month low of $23,234, despite a 4 percent recovery. Due to this, BTC’s market share has drastically decreased, dropping from 71.7 percent (an all-time high) to 41.73 percent.
Is the Altcoin Season Nearing?
“Altcoin” is a derogatory name by many in the cryptocurrency field, denigrating anything that isn’t the original digital asset. However, the Altcoin index is a good tool for identifying where investors stand on diversification outside of blue-chip stocks.
How it functions: At least 38 of the top 50 digital currencies have outperformed BTC during the past 90 days. It is said to be altcoin season. The index does not include stablecoins or tokens backed by assets, such as wrapped Bitcoin and Lido Staked Ether.
Get the latest economy news, trading news, and Forex news on Finance Brokerage. Check out our comprehensive trading education and list of best Forex brokers list here. If you are interested in following the latest news on the topic, please follow Finance Brokerage on Google News.
Image and article originally from www.financebrokerage.com. Read the original article here.