The Bitcoin (BTC) dominance percentage, which is the Bitcoin market cap divided by the total crypto market cap, has been consistently sinking over the past several months amid the decentralized finance (DeFi) frenzy. On May 15 the Bitcoin dominance percentage was 69.2%, and since then it has steadily declined to as low as 58.2% this past week. However, this may be good news, since current market conditions are similar to early 2017.
The recent decline in Bitcoin dominance percentage indicates that altcoins are rallying faster than Bitcoin. Specifically, a wide spectrum of DeFi related tokens have been seeing tremendous rallies, such as Chainlink (LINK). Also, the networks that DeFi platforms run on have been seeing big rallies as well, especially Ethereum (ETH) but also EOS and Tron (TRX).
Essentially, it seems since May the crypto space has been in an ‘altseason’, except this altseason is different than the ones in the past. DeFi-related cryptos are leading this altseason, unlike past altseasons when initial coin offering (ICO) cryptos led the way.
That being said, although Bitcoin dominance percentage is declining, all ships are rising with the DeFi frenzy, and the investment that DeFi is attracting is part of the reason why Bitcoin has rallied to $12,000.
Zooming out, this is the steepest decline in Bitcoin dominance percentage since late 2017 and early 2018 when the price of Bitcoin collapsed. That being said, the current state of the crypto space is more comparable to early 2017 when Bitcoin was rallying and altcoins were rallying as well. In recent weeks and months Bitcoin has been rallying despite it’s declining dominance percentage.
Thus, market conditions are currently similar to early 2017, with Bitcoin and altcoins both rallying, and perhaps this could be a signal that the current crypto rally has the potential to turn into a record setting bull run, just like the bull run of 2017.