However, The Market Dominance Of The Leading Crypto To Date Dropped Below 45%

Cryptocurrencies seem to have entered a bullish period over the past week, with many of the crypto leaders recording price increases in the double-digit area.

Bitcoin, for example, managed to push past $46,000 and secured a 14% weekly price increase, while Ethereum added 18% in weekly gains to reach a current value of $3,242.01. Among the biggest price gainers are Cardano and Ripple, which made 50% price increases.

The upwards momentum pushed the total market capitalization to $1.96 trillion, which is a sign of a comeback from the crypto sector after the May market cap high and the following market crash.

In the past three weeks, the crypto sector’s market cap skyrocketed, recording an increase of 60% as of press time.

Most of the market cap increase is due to Bitcoin bulls pushing the leading crypto up, which also gives momentum to the rest of the crypto sector. However, such extreme market cap movements may indicate another breakdown is coming, like the May 2021 events, which saw the total crypto market cap reach a high of $2.5 trillion but fell down afterward to around $1.3 trillion.

The recent price gains have put the question of another altcoin season forming, as most of the altcoins are seeing coherent price gains to Bitcoin, while Bitcoin’s dominance is falling down due to the altcoin uproar. However, in order for an altcoin season to really kick in, 75% of altcoins out of the top 50 need to outperform Bitcoin.

Indeed, Bitcoin’s market dominance dipped below 45% for the first time in several weeks, as Ethereum, Binance Coin, Cardano, XRP and Dogecoin saw strong gains in the last seven days. But, as experts note, an altcoin season is hard to be achieved due to the bullish sentiment from Bitcoin holders and traders.

For example, indicators like Bitcoin’s network activity increased sharply during the last few days as the price of the world’s largest cryptocurrency jumped above $46,000.

“Address activity continues to be a very important metric to watch for hints on whether Bitcoin will cross $50k or fall below $40k. Currently, 720k to 930k addresses use the BTC network daily, and we’re looking for a spike above 1 million as a bull run signal,” crypto analytics company Santiment noted.

The bullish stance on Bitcoin is further supported by the ongoing outflow of BTC from exchanges to crypto wallets, known as the exchange supply ratio (ESR).

“Bitcoin has continued to flow out of exchanges in August at a rate between 75k and 100k per month. This magnitude of outflow is similar to the period between 2020 and Q1 2021, where heavy accumulation and the GBTC arbitrage trade dominated,” Glassnode reported.

Furthermore, data from ETC Group shows that the total transaction volume on Bitcoin’s blockchain rose 330% year-over-year to $527.1 billion, compared to $120 billion in Q2 2020. Bitcoin average transaction fees also spiked more than 1,000% while average daily active addresses neared one million.

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