Bitcoin Dominance Unlikely to Return to 70% Levels Seen in December 2020, Analyst Says

Into The Cryptoverse founder Benjamin Cowen explained in an interview with The David Lin Report on Aug. 17.

A popular cryptocurrency analyst believes that Bitcoin ( BTC ) dominance will not return to the highs seen in the previous bull cycle, despite the asset's recent price rally.

“I don’t think it is going back up to 70%, personally. My target for Bitcoin dominance has been 60%,” Into The Cryptoverse founder Benjamin Cowen told The David Lin Report on Aug. 17.

Bitcoin dominance describes the ratio of BTC's market capitalization to the entire cryptocurrency market. During major “altcoin seasons,” such as the one seen in 2021, Bitcoin dominance tends to decline as traders shift capital into alternative cryptocurrencies. However, after “the breakdown,” BTC dominance usually begins to slowly return to its previous level.

“Typically, what happens is that Bitcoin dominance will slowly go back up to where it was before the breakdown,” Cowen explained.

However, this cycle is different, the analyst noted, adding that even when BTC reaches its peak dominance, it will not be the same as in the past.

“I think there is a lot of room for Ethereum and many other cryptocurrencies,” Cowen said.

The analyst added that he believes Bitcoin will “make that final move” towards 60% as early as September or as late as December.

According to TradingView data, Bitcoin dominance stands at 57.36% at the time of publication, up 4.25% since July 18.

However, pseudonymous crypto trader Kaleo recently told their 643,700 X followers that Bitcoin dominance may have already peaked.

“I feel fairly confident this is the cycle top for Bitcoin Dominance.” Kaleo stated in an Aug. 9 X post when Bitcoin dominance was around 57.50%.

“Didn’t quite hit the 60% I was expecting - which is a good thing because that would have been painful.”

They added that "the real" alt season begins when Bitcoin dominance falls below 50%.

Traders often use Bitcoin dominance as an indicator to sell BTC and shift capital into alternative assets, such as altcoins.

In December 2020, Bitcoin dominance reached 70.23% before the asset's price surged around 220% to hit $61,283 in March 2021, just four months later, according to CoinMarketCap data.

Cowen noted that Bitcoin dominance is “a bit trickier” in 2024 compared to 2019, when it peaked slightly above 71%, because the stablecoin market capitalization was much lower back then.

“If you combine Bitcoin and Tether dominance, to calculate your ‘flight to safety dominance,’ that is sitting at 63%.” Cowen said, adding that this is the figure he prefers to use.

“That is still a very high level of flight to safety dominance, which is a good indicator that we are still in a bear market.”