Altcoin dominance is at its highest level since June 2018 after Bitcoin price fell over the weekend. At the time of going to press, BTC dominance was 39.98%. With a dominance of around 20 percent, the ETH held the second-highest market share; Binance Coin, DogeCoin, Cardano, Tether and XRP followed.
While BTC has still been up around 55 percent since January 1, the price of BTC has dropped significantly in recent days.
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A number of analysts point their fingers at Tesla founder Elon Musk, who abruptly announced that the company would stop accepting Bitcoin payments. Musk also appeared to be suggesting that Tesla may be outsourcing some of its BTC holdings, but later clarified that Tesla did not sell any of its bitcoins.
Is that an “old season”?
Beyond Elon Musk, however, analysts have been noticing a trend towards an “old season” for several months.
Why global deflation is not affecting these cryptocurrencies
In early May, Chad Steinglass, Head of Trading at CrossTower, told Finance Magnates: “Since BTC has been struggling to find the direction for weeks, ETH and many other Altcoins have taken the traders’ attention.”
While Bitcoin’s performance has received plenty of positive coverage this year, it pales in comparison to that of Ether (ETH) and other altcoins.
Still, Steinglass said, the Bitcoin bulls were hoping for good news; “After consolidating in BTC towards the end of April, the bulls were hoping for the announcement of another company adding BTC to foreign currency reserves in the heart of tech earnings season,” he said.
“The earnings reports came and went with no mention of BTC, however, and in fact TSLA cut their holdings a bit from the big companies that were already involved, and Microstrategy (MSTR) did not add during the recent slump.”
Indeed, some cryptoanalysts believed that Tesla’s first entry into Bitcoin would inspire other companies to do the same – but the public entry of other large companies into Bitcoin and other cryptocurrencies did not come about in a meaningful way.
Now that Tesla is taking a step back from Bitcoin, the opposite appears to be happening. When the announcement was made, Elon also said Tesla would study other cryptocurrencies with a lower environmental impact. The communities of these possible “other cryptocurrencies” had mixed reactions, however.