- Bitcoin secured its position as the leading coin as its dominance grew.
- Bitcoin’s prospects looked bullish based on historic performance.
Bitcoin’s [BTC] dominance has been on the rise for the last few days. This is the first time that it has reclaimed the important 50% dominance level since April 2021, and it is an important observation for multiple reasons.
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First, the higher dominance meant that Bitcoin was receiving more attention relative to altcoins. Thus, BTC was in a position to take advantage of any sentiment shift that could be favorable to the crypto market.
Source: TradingView
BTC’s dominance drops during bear markets, as was the case in 2018 and the second half of 2021. The metric conversely surges as BTC recovers, which is a finding that coincided with the recent observations. But perhaps it is best to consider the opinions of one of the industry experts.
Michael Saylor of MicroStrategy recently offered some insights regarding Bitcoin dominance and his thoughts on its impact. Saylor believed that Bitcoin will maintain strong dominance and perhaps even grow to over 80%. His expectation is based on the growing hash rate, as well as the improving regulatory environment.
Regulatory clarity is going to drive #Bitcoin adoption by eliminating the confusion & anxiety that has been holding back institutional investors. Bitcoin dominance will continue to grow as the #Crypto industry rationalizes around $BTC and goes mainstream. pic.twitter.com/Foq4lpderj
— Michael Saylor⚡️ (@saylor) June 13, 2023
Saylor’s confidence is based on the expectation that Bitcoin will remain dominant and attract institutions. However, the king coin is yet to recover from the loss of institutional liquidity courtesy of the crash of 2022.
Regulatory uncertainty further exasperated the situation, but BTC institutional demand may turn a new leaf now that the regulatory situation seemed to be improving.
Will Bitcoin’s dominance attract institutional investors?
The Purpose Bitcoin ETF Holdings metric is the best way to understand the situation related to institutional investors. As per the chart below, there were a lot of swings based on seasonal demand and sell pressure.
The latest wave of sell pressure started in mid-April and recently slowed down, sparking conversation of a possible pivot.
Source: Glassnode
How much are 1,10,100 BTCs worth today?
The same institutional metric indicated that some accumulation had been taking place in the last few days. However, investors should not expect a sudden surge. This is because address activity was still low, even though there was slight improvement since mid-May.
Source: Glassnode
The Bitcoin dominance surge comes amid some excitement regarding the price bounce from a key support line. This stronger dominance may indicate that confidence among investors was on the rise, a move that could favor BTC bulls.
