Bitcoin Dominance Index Retests Breakout Level
The Bitcoin Dominance Index measures Bitcoin’s Market Cap/ Total Market Cap of All Cryptocurrencies. While the overall market has been in retracement for about a month, bitcoin dominance has regained some ground.
This type of action is expected. The liquidity profile is far lower in altcoins than it is in bitcoin on both the ask and the bid sides of the market. So during bull phases, prices of altcoins can significantly outperform, but on the way down they can severely underperform.
Below is the chart of the Bitcoin Dominance Index. It looks as if we’re forming a fourth wave at the retest of the breakout level during this consolidation at the first part of summer.
If bitcoin is able to reverse here, it is likely that altcoins will again outperform in this final phase of the bull market. Although in general altcoins will likely outperform, I do not believe alts like Dogecoin and others that have already been pumped and dumped will.
As I’ve stated previously, I do think LTC will significantly outperform here for fundamental reasons and could be a major reason why BTC.D reverses lower into fall.