Bitcoin’s dominance in the overall cryptocurrency market capitalization, known as Bitcoin dominance, has surged to a two-year high, surpassing 53%.
As per TradingView data, Bitcoin (BTC) dominance has experienced a gradual increase from 52% to over 53% within the past week. Notably, it had reached as high as 54% in October and peaked at 55% earlier in December.
The upward trend in Bitcoin dominance has been consistent throughout 2023, reaching levels not observed since April 2021. The TradingView chart indicates that the uptrend, which has persisted since the beginning of the year, remains intact, with Bitcoin dominance consistently trading above its 200-day moving average throughout the year.
Bad year and bearish outlook for ETH/BTC
Historically, during Bitcoin bull markets, there has been a tendency for altcoins, particularly Ethereum’s native token Ether (ETH), to experience even more significant gains. However, this year has seen a shift in this pattern, with Bitcoin gaining dominance over the market. The ETH/BTC trading pair has moved lower, and there’s speculation that Solana (SOL) is emerging as a strong contender, surpassing ETH as the frontrunner in this market cycle.
The relative underperformance of ETH compared to BTC has led some traders to adopt bearish positions. Notably, veteran trader Peter Brandt publicly announced this week that he has initiated short positions on ETH. He mentioned, “if the rising wedge in Ethereum complies with the script, the target is $1,000, then $650,” indicating a potentially bearish outlook.
Since the beginning of the year, the ETH/BTC pair has experienced a decline of over 28%, falling from 0.0723 BTC per ETH to 0.0516 at the time of this writing. During the same period, Bitcoin’s price in US dollar terms has increased by 167%, while Ether’s US dollar price has risen by 90%. This divergence in performance has sparked discussions about the changing dynamics within the cryptocurrency market.
