Key Takeaways:

The crypto markets experienced sudden surges and notable corrections this week.

Bitcoin reached a new all-time high (ATH) of $89.9k, with Ethereum surpassing $3,000, and Dogecoin overtaking XRP and USDC in market capitalization.

Recently, Altcoins have seen corrections while Bitcoin has not, driving Bitcoin’s market dominance up to 60%.

Bitcoin’s Market Dominance Hits 60%

Bitcoin has soared to new ATH levels, touching $89.9k, and is stabilizing around $86k. It has been one of the top performers this week, propelling the total crypto market cap close to $3 trillion. At the time of reporting, Bitcoin’s market dominance sits at 59.8%, poised to reach 60% due to weakened Altcoin performance and heightened investor interest in Bitcoin.

Historically, Bitcoin's market dominance has gone through four major phases:

  1. Early Drop in Dominance (2013–2018): As crypto markets expanded, Bitcoin’s dominance dipped to 34% by 2018.

  2. 2019 Rally: Bitcoin rebounded, rising from 34% to 70% as its price climbed from $3.6k to $12.1k. However, this rally cooled off in 2021.

  3. Post-2021 Decline: Bitcoin’s dominance fell from 69.2% to 38.3% by the end of 2022, coinciding with the crypto winter and the introduction of Bitcoin ETFs.

  4. Current Growth Phase (2023–2024): Bitcoin surged from $16k in early 2023 to around $90k in late 2024, lifting its dominance to 60%. This phase has been heavily influenced by institutional adoption and Bitcoin ETF investments, which were less significant in previous cycles.

It’s likely that Bitcoin's market dominance has reached a peak, as the cryptocurrency stabilizes at its current levels.

Altcoin Decline Explained

Altcoins initially rallied, with Ethereum crossing $3,000, XRP reaching $0.65, and Solana surpassing its 2024 high of $210. However, these gains quickly corrected, possibly due to heavy profit-taking as markets recognized a lack of long-term institutional interest compared to Bitcoin.

Two unique cases emerged:

  • Ethereum: Suffered declines as whales sold off, ETFs failed to gain traction, and overall market utility declined.

  • XRP: Although backed by multinational finance giants like JP Morgan, XRP took a hit due to its volatility and ongoing regulatory issues with the SEC. While XRP is widely used for transactions, it lacks Bitcoin’s reserve asset appeal, making it more susceptible to volatility when usage dips.

Market Outlook: Can Current Levels Hold?

Crypto markets are likely to revisit recent highs as capital inflows remain strong. One key driver of these consistent inflows has been the 0.75% interest rate cut by the U.S. Federal Reserve, injecting fresh liquidity into the markets and pushing the crypto market cap to $3 trillion.

Historically, markets tend to rebound after profit-taking corrections. The volatility seen this week, especially in derivatives data, may stabilize over the next two weeks, setting the stage for the market to settle at higher levels by the end of November 2024.