April 19, 2024
Bitcoin Dominance Hits 54%, Highest in 2.5 Years Ahead of BTC Halving
Bitcoin News

Bitcoin Dominance Hits 54%, Highest in 2.5 Years

Bitcoin’s market dominance has reached 54%, its highest point in the last 30 months, signaling the cryptocurrency’s strengthening position as it approaches the upcoming halving event set for April 2024. The Bitcoin halving is a significant occurrence where the mining reward per block is halved, effectively reducing the supply of the asset amid increasing demand, which typically results in a bullish price trend. This event happens every four years, and the next halving in 2024 will decrease the BTC mining reward from the current 6.25 BTC to 3.125 BTC.

Since the total supply of Bitcoin is fixed at 21 million, the halving of BTC mining rewards creates a supply-demand imbalance that reduces the introduction of new BTC into the market. Bitcoin’s market dominance, which measures its market capitalization relative to the overall digital asset market, serves as an indicator of the cryptocurrency’s strength. A market dominance exceeding 50% is generally seen as highly bullish and represents its highest level since the last bull run in April.

Bitcoin’s market dominance began to rise at the beginning of October, climbing from below 49% to reach this two-and-a-half-year high. Historically, October has been considered a bullish month for cryptocurrencies, often referred to as “Uptober.” This is evident from Bitcoin’s double-digit percentage surge in recent weeks, propelling BTC from just below $27,000 at the start of October to achieve a new yearly high of $35,000.

In 2017, Bitcoin maintained a market dominance of over 80%, with Ethereum (Ether) holding nearly 10% to 17% in market dominance. Over the years, Bitcoin has seen a decline in its market dominance due to the emergence of numerous cryptocurrencies and the proliferation of new tokens during the 2021 bull run.

Image by starline on Freepik

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