Cryptocurrency analyst Benjamin Cowen noted that the Bitcoin (BTC) dominance chart (BTC.D) is still low, indicating that an altcoin showdown is imminent. The BTC dominance chart tracks how much of the total value of the cryptocurrency market belongs to Bitcoin. According to Cowen, the altcoin market will continue to be a falling blade until BTC.D resolves to the upside:
“One of the things that made me really expect a drop in the altcoin market is, of course, Bitcoin dominance. It’s still very low and currently at 42 percent. If you exclude stablecoins, it’s at around 48 percent. Dominance is still low and what’s holding me back from buying altcoins in 2022 That’s why I said that year, ‘Look guys, I know you like shiny altcoins in a bull market, but they’re not your friend in a bear market, so don’t marry an altcoin.’ I am aware that dominance is still low, and that metric has largely prevented me from buying altcoins, so far I can say that it turned out pretty well.”
The dominance of altcoins in the cryptocurrency market (the low dominance of Bitcoin) indicates that investors are still speculating on cryptocurrencies other than Bitcoin, showing interest in them.
Using the smart contract platform Cardano (ADA) as an important altcoin example that could fall, Cowen pointed out the massive price drop of the cryptocurrency last year and said:
“The inherent risk of a single altcoin is not worth it and ADA is currently down 92 percent, but during the last bear market, ADA is down 98 percent, almost 99 percent from its all-time high. That should give you an idea of how bad the situation could get. If ADA were to drop 98.77 percent, that would mean it would fall as low as $0.04.”