As the reader has probably noticed, the price of bitcoin (BTC) is on the rise. Since January 1, BTC is up nearly 60 percent. Bitcoin is currently taking the lead in the crypto market and that is why we see bitcoin dominance increasing at a rapid pace. At the time of writing this is 46.6% according to TradingView.
What is bitcoin dominance?
Bitcoin dominance is Bitcoin’s relationship to the rest of the crypto industry, including stablecoins. Since the weekend, bitcoin dominance is already up more than 3 percent. Almost half of the total value of the crypto sector is in bitcoin. This is the highest level in nine months.
According to analysts, the rise in bitcoin’s dominance is cause for optimism. This spike in dominance historically heralds a change of course.
Every #Bitcoin bull market has commenced with a spike in BTC dominance (as has every bear market). pic.twitter.com/xIiiOdyqVH
— tedtalksmacro (@tedtalksmacro) March 15, 2023
“Every bull market started with a spike in Bitcoin dominance. Also any bear market, for that matter.”
Since we are currently in a long bear market, the dominance spike could indicate a course change to the upside. There is a second, more technical reason that supports this story. The graph of bitcoin dominance appears to be a ‘Wyckoff distribution pattern‘ to shape.
This same distribution pattern marked the initial bitcoin peak of $65,000, followed by a drop to $30,000. Now we see that same pattern on the bitcoin dominance chart, but reversed.
Hope in the crypto market is back
These technical indicators therefore give cause for cautious optimism, the general sentiment has not been this bullish in ages. After a very grim crypto winter, with the arrival of the new spring, optimism also seems to be returning. The trading firm DecenTrader gave in a statement on March 16 that Bitcoin sentiment is turning bullish.
“It has been a long and cold winter for bitcoin and crypto. However, recent developments have catapulted the price of bitcoin, flipping sentiment from bearish to bullish.”