Bitcoin dominance makes new peak signaling 'altseason' could soon be underway

Bitcoin dominance over the market continues increasing while the interest for altcoins declines without any clear signs of a bullish breakout.

If the cryptocurrency market behaves like it has in the past, altcoins could soon make a major come back that initiates their bull run.

As new ventures joined the space and introduced their tokens by forking off other cryptocurrencies or launching initial coin offerings, the industry was flooded with new projects that claimed to bring innovation and become the "New Bitcoin." As a result, speculation took hold over the market and capital started flowing out of BTC into new startups, leading to a significant drop in its dominance.

For the first time since its inception, Bitcoin plunged from an 86 percent dominance in Feb. 20, 2017 to 39 percent in early June of the same year while Ethereum rose to 31.5 percent and XRP to 9.4 percent.

Despite regaining control of the market to reach a high of 65 percent on Dec. 8, 2017, BTC dropped to a new all-time low of 32.4 percent a month later and since then, its dominance has hovered between 50 and 57 percent.

This could be one of the reasons why institutional investors are mainly interested in developing BTC products like CME Group's Bitcoin futures market, Fidelity's Bitcoin trading desk, and Bakkt's Bitcoin deliverable futures market, just to name a few.

Even though there seems to be an outgrowing interest for Bitcoin while altcoins are left behind, there are those who argue that a similar scenario to what happened in early 2017 could develop and BTC dominance could soon plummet again, allowing altcoins to regain an important share of the market.

Paddy Stash thinks that there seems to be an inverse correlation between altcoins and Bitcoin dominance that could confirm that volatility is coming to altcoins.

Thus, for the analyst now that Bitcoin has reached a 68 percent market share, it could soon drop significantly allowing altcoins to rise once again.

Zhu believes that over 300,000 ETH have been bought, which could be signaling that capital is indeed flowing into altcoins and they could soon begin a new bull run.