Bitcoin dominance is still in the expansion phase: Glassnode

Data from previous crypto market cycles suggests that Bitcoin (BTC) dominance over altcoins will continue to increase over the next several months, according to Glassnode.

In a newly published report, blockchain and market intelligence explains how the dominance of the leading crypto asset is shaping up against the second largest crypto, Ethereum (ETH), compared to previous years.

Ethereum beating gold, but losing to BTC

Benchmarked against gold, bitcoin has appreciated 93 percent this year, while its previous price remains below $2,000 an ounce. ETH, on the other hand, appreciated by only 39%.

According to Glassnode, while both assets experienced “similar weight loss” over the year, bullish periods saw more significant gains for BTC. Glassnode wrote:

“Previous cycles have seen ETH drop to a relative depth of more than -50% during the recovery phase of the bear market, the current drop has reached -38%.”

Glassnode's downtrend for ETH versus BTC has continued for 470 days since June 2022, from the previous “cycle low” of less than 400 days in previous cycles.

In the year As of November, Bitcoin's dominance has risen from 38% to 53% by the end of 2022, with Ethereum's dominance at just 17%. Market dominance refers to how much of the total crypto market value Bitcoin and Ethereum comprise, respectively.

In recent weeks, the ETH/BTC price ratio has fallen to a 15-month low of 0.052. The excitement around Bitcoin ETFs, alongside the “flight to quality” from bonds to other assets, has helped push BTC away from its other crypto competitors.

As a group, altcoins excluding stablecoins have grown 37% this year, followed by BTC. Stablecoins, which are typically backed by non-crypto assets like fiat currencies, account for more than 9% of crypto's total market capitalization.

When will the Bitcoin season end?

According to James Cheek, lead analyst at Glassnode, the market is still “well and truly in a period of Bitcoin dominance expansion.

“It took until March 2020 when it started to reverse,” Czech said in a recent video analysis of the previous cycle.

In the year In March 2020, Bitcoin fell from $9000 to below $4000 on “Black Thursday”, only to recover and rally to over $64,000 in the following 12 months. However, this period of support was accompanied by higher gains for ETH and other altcoins such as Dogecoin (DOGE).