Bitcoin (BTC) Price Dips, But Dominance Over the Market Is on the Rise

Bitcoin (BTC) price has dropped by 4.3% in the last three days after nearly reaching $97,900 on May 2.

Bitcoin (BTC) price dropped by 4.3% over the last three days after nearly touching $97,900 on May 2. Despite showing resilience at the $94,000 level on May 5, some traders are disappointed that strong institutional inflows have not been enough to sustain bullish momentum. However, several positive signs suggest that a new all-time high for Bitcoin in 2025 might still be in sight.

Bitcoin’s dominance over the broader cryptocurrency market surged to 70%, its highest since January 2021. This occurred despite a wave of new token launches, including several top-50 projects like SUI, Toncoin (TON), PI, Official Trump (TRUMP), Bittensor (TAO), Ethena (ENA), and Celestia (TIA). Such a high level of dominance makes riskier altcoins less appealing to new market entrants.

The spot Bitcoin ETFs recorded $4.5 billion in net inflows between April 22 and May 2. At the same time, the increasing appetite for Bitcoin futures signals greater institutional adoption, whether for leverage to hedge against downside risks or for bullish bets.

According to CoinGlass, the total open interest in Bitcoin futures markets reached 669,090 BTC, a 21% increase since March 5. Even after Bitcoin's price crashed below $75,000 in early April, demand for leveraged positions remained strong. The open interest in BTC futures on the Chicago Mercantile Exchange (CME) alone exceeded $13.5 billion, highlighting substantial institutional demand.

Several factors explain why Bitcoin struggled to regain the $100,000 level. Traders who bought in anticipation of the US Strategic Bitcoin Reserve bill on March 6 grew increasingly frustrated as the government never disclosed its BTC holdings or announced plans for further purchases. Similarly, state-level Bitcoin bills repeatedly failed, with the latest setback occurring in the US state of Arizona.

Strategy doubles its plans for BTC acquisitions despite the global trade war

Over the last three months, gold has outperformed most assets, increasing by 16%, while Bitcoin dropped by 5% and the S&P 500 corrected by 6.5%. This finding challenges the narrative of Bitcoin as an uncorrelated asset, as the cryptocurrency repeatedly failed to decouple from the S&P 500 amid increasing economic risks. The global trade war led investors to prefer fixed-income assets and cash positions.

Bitcoin's recent fall to $94,000 is especially noteworthy given that Strategy, a US-listed company headed by Michael Saylor, announced the acquisition of 1,895 BTC on May 5, after doubling its capital increase plan to fund further Bitcoin purchases. However, since investors were initially unsure about Strategy's ability to generate additional capital, the announcement of an $84 billion plan on May 1 has mitigated some of this risk.

For Bitcoin to attain a new all-time high, investors might need to see signs of improving US-China trade relations, as tariffs have impacted overall risk appetite. Nonetheless, the crucial elements for a BTC bull run above $100,000 appear to be in place.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.