Bullish signal? Ethereum market dominance above 20%

In the past five years, Ethereum has not only taken a significant market share from bitcoin, but it has grown steadily over the same period of time. While bitcoin had held most of the market dominance for the longest, it hasn’t taken long to reach altcoins to gain majority share. In fact, this year, the market dominance of bitcoin feller is 50%.

As the dominance of the ethereum market has grown, it is important to analyze what this could mean for the digital asset and how it will develop in the future. Ethereum has certainly had an incredible run this year, but does the growing dominance of the market indicate a continued rally?

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Ethereum dominance on the rise

Ethereum’s market capitalization had grown as a result of the digital asset’s price surge this year. At nearly $ 500 billion, it remains at only about half the market capitalization of bitcoin, but has grown to become one of the most valuable assets in the world. Following this, altcoin’s market dominance also increased as adoption of the asset grew rapidly.

In the space of a year, the asset’s market dominance has grown by 10%, taking most of bitcoin’s share. This has been an indicator of how much the cryptocurrency had grown, as well as some long-term implications.

Ethereum Price Chart from TradingView.com

ETH is trading at $ 3,918 | Source: ETHUSD on TradingView.com

As ethereum continues to maintain such a large dominance of the market, it solidifies its place as one of the most valuable cryptocurrencies in the space. With its many use cases, such as DeFi and NFT, in addition to its real-world applications, ethereum is expected to continue to have a larger share of market dominance.

What this will mean for the altcoin is quite simple. With this kind of rapid adoption, there will be more demand and as the burning of ETH continues to reduce the supply of coins in the market, the value of the digital asset could reach new highs in the coming months.

Altcoins taking control of the market

In a recent report from TradingPlatforms, altcoins are described as having tripled their dominance of the market in the last seven years. At one point, bitcoin held over 90% market dominance. However, as more altcoins like ethereum have gained prominence and seen an increase in adoption, this number has dropped significantly.

The report claims that the rise in dominance of altcoins has been the result of a mindset shift when it comes to cryptocurrencies. Many investors believe that bitcoin has already grown too large and too expensive and as such they are considering what they believe to be ‘the next bitcoin’. This has led to the adoption of altcoins as an alternative to bitcoin.

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The author also points out that greater market dominance translates to higher market limits, which in turn plays an important role when it comes to how a cryptocurrency is classified. Investors will generally look at market limits to determine whether a cryptocurrency is ‘safe’ to invest in and “in essence, it is an indicator of how stable the asset is,” the report reads.

Following this, ethereum may be heading for greater adoption as more investors look to its dominance of the market as an indicator of its stability. This points to bullish trends as the new year progresses.

Featured Image from ElevenNews, Chart from TradingView.com

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Bullish signal? Ethereum market dominance above 20%

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