Bitcoin’s Market Dominance Hits 4-Year High, Altcoins Struggle
Bitcoin has surged to capture nearly 65% of the total cryptocurrency market capitalization, reaching levels not seen since early 2021. This milestone comes as BTC approaches the $100,000 threshold, signaling a potential shift in investor sentiment across digital asset markets.
The world’s leading cryptocurrency has maintained strong price action above $97,000 through early May, increasing its dominance by more than 13% since December 2024, according to The Crypto Basic. This concentration of market power has sparked debate about the future of altcoins in the current crypto cycle.
Historical Patterns Point to Potential Reversal
Bitcoin’s current 64.94% market dominance has pushed the cryptocurrency into a historically significant resistance zone. The last time BTC reached similar levels in January 2021, it triggered a dramatic reversal that ultimately dropped dominance to below 40% by September of that year.
That seven-month decline coincided with the explosive growth of altcoins, creating what traders call an “altcoin season.” Market analysts are watching closely to see if this pattern will repeat, as Bitcoin tests similar technical barriers in 2025.
“Bitcoin dominance has claimed a high last seen in the previous bull run, leading to discussions around a potential altcoin season,” notes BeInCrypto, highlighting that dominance metrics are approaching levels seen during the 2020-2021 market cycle peak.
Institutional Capital Gravitates Toward Bitcoin
The surge in Bitcoin’s market share reflects growing institutional preference for Bitcoin over alternative cryptocurrencies. This trend accelerated following the January 2025 approval of spot Bitcoin ETFs, which have continuously attracted capital despite price volatility.
According to the latest Bitfinex Alpha report, Bitcoin showed “notable resilience relative to other risk assets,” having surged more than 32% from its April lows to reach nearly $98,000. This recovery demonstrates Bitcoin’s growing status as the preferred digital store of value during periods of macroeconomic uncertainty.
Altcoin ETF Approvals Could Spark Rotation
While Bitcoin currently dominates investor attention, potential regulatory developments could shift market dynamics later this year. Bloomberg Intelligence estimates high approval probabilities for several altcoin ETFs in 2025, with Litecoin and Solana at 90%, XRP at 85%, and several others above 75% likelihood.
“If this plays out, we’re in for one hell of an altcoin season,” predicted analyst Ak47 on social media, as reported by TradingView News. These potential approvals could trigger capital rotation from Bitcoin into alternative cryptocurrencies, similar to what occurred in 2021.
Technical Indicators Signal Potential Altcoin Recovery
The monthly Relative Strength Index (RSI) for Bitcoin dominance has reached an all-time high of 72.22, signaling overbought conditions and potentially setting the stage for a correction. Historical market behavior suggests such technical readings often precede pullbacks.
If Bitcoin dominance retraces to key Fibonacci support levels between 59% and 49%, analysts expect significant capital to flow into alternative cryptocurrencies. However, without fresh liquidity entering the broader market, any altcoin recovery may remain limited in scope.
