Bitcoin (BTC) market dominance has reached 54%, its highest level in the past 30 months, suggesting the top cryptocurrency is strengthening ahead of the halving event scheduled for April 2024.
The Bitcoin halving refers to the halving of mining rewards per block, reducing the supply of the asset amid growing demand and leading to bullish price momentum. Bitcoin halves every four years, and the next halving in 2024 will reduce BTC mining rewards to 3.125 BTC from the current 6.25 BTC. With the total supply of Bitcoin fixed at 21 million, the halving of Bitcoin mining rewards creates a supply and demand gap that reduces the influx of new Bitcoins into the market.
Bitcoin market dominance, a measure of the crypto asset’s market capitalization relative to the overall digital asset market, highlights the asset’s strength. Market dominance above 50% is considered highly bullish and is the highest since the last bull run in April.
Bitcoin’s market dominance began to recover in early October, when its share rose from below 49% to a two-and-a-half-year high. October has historically been considered a bullish month for cryptocurrencies, hence the nickname “Uptober.” This is evident from Bitcoin’s double-digit percentage surge over the past few weeks, which has helped the currency rise from just under $27,000 in early October to a new yearly high of $35,000.
Uptober is great, but the party might not be over yet.
November is historic #bitcoinBest month ever. pic.twitter.com/kaMMt7pgZz
— Miles Deutscher (@milesdeutscher) October 25, 2023
In 2017, Bitcoin maintained a market dominance of more than 80%, followed by Ethereum (ETH), which accounted for nearly 10%-17% of the market dominance. Bitcoin’s market dominance has declined dramatically over the years due to the increase in the number of cryptocurrencies and the growth of several new coins during the last bull run in 2021.
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