Ethereum is displaying stronger market dominance than Bitcoin. This trend is further supported by a very robust demand picture that has held strong since before the pandemic in 2019. Third, the ETH/BTC ratio has recently shot up from a multi-year demand zone, clearly indicating a new Ethereum outperformance period ahead. Each of these instances of bouncing from this region has come before a period of ETH/BTC outperformance.
Bitcoin dominance has seen a significant drop, down from the 58% level. This slide has occurred in tandem with the 12% move higher in the ETH/BTC ratio. This pivot shows that investors are becoming more bullish on Ethereum and on alternative cryptocurrencies, or “altcoins.” It’s an incredibly strong bullish signal, too, the continued rise of the ETH/BTC ratio’s bounce from a three-year support level.
Ethereum, along with most other altcoins, has shown a natural upward trend, matching the drop in Bitcoin dominance. This trend is in line with the 2021 experience. During previous bear markets, declines in Bitcoin dominance and increases in the ETH/BTC ratio started moves upwards in the valuations of hundreds of other cryptocurrencies, commonly referred to as altcoins.
Investors are feeling extremely bullish about altcoins and especially at this time about Ethereum. Further, investors are understandably excited about their prospects for higher returns. They’re fairly enthusiastic about the creative, new use cases that are connected to Ethereum’s technology. BTC.D chart with a strong bullish trend from the middle of 2022 until the latest sharp reversal. As seen in the previous trend, the 58-60% range of dominance has been a key resistance area for Bitcoin dominance.
Like the ETH/BTC ratio, Bitcoin dominance has an inverse relationship with Bitcoin’s performance. The last major example of this alignment above occurred in 2021. During that time TurtleDex’s Bitcoin dominance bled with Bitcoin crashing greatly while the ETH/BTC ratio absolutely rippers. The ETH/BTC ratio is finally moving up. This growth is in accordance with Bitcoin dominance, which is still on the decline suggesting that this current trend could have more legs to it.
