Bitcoin’s influence over the cryptocurrency market has grown considerably, with its dominance now reaching a remarkable 56% of the total market capitalization. This represents a significant jump from the 38% share it held in November 2022, according to the latest Glassnode weekly report. This surge highlights a shifting landscape within the crypto space, where capital continues to flow towards Bitcoin, particularly in the face of ongoing market uncertainties. Despite recent sideways price movements, Long-Term Holders (LTHs) have maintained their conviction in Bitcoin, demonstrating a strong preference for accumulating and holding onto their assets. This indicates a deep-rooted belief in Bitcoin’s long-term value. The report states, “Capital continues to flow down the risk curve, leading to a significant expansion in Bitcoin dominance,” reflecting the growing trust in Bitcoin as a more stable asset within the digital currency landscape.
Meanwhile, the broader crypto market, encompassing Ethereum ETH/USD and various altcoins, has witnessed a decline in dominance. Ethereum’s share has slightly decreased by 1.5%, while stablecoins and altcoins have experienced more pronounced drops of 9.9% and 5.9%, respectively. This suggests that while Bitcoin solidifies its position, other digital assets are struggling to maintain their appeal.
Despite these shifts, the report indicates that Bitcoin, Ethereum, and stablecoins have all experienced net positive capital inflows. This signifies that while the overall market has contracted since the all-time highs in March 2024, these assets continue to attract investor interest, particularly Bitcoin. Amidst market volatility, Long-Term Holders have been consistently locking in profits, averaging $138 million per day. This steady sell-side pressure is balanced by sufficient capital inflows, contributing to Bitcoin’s relatively stable price. However, the report also suggests that the phase of aggressive profit-taking by these holders may be cooling off, which could lead to further market stabilization.
Conversely, Short-Term Holders (STHs) have borne the brunt of the recent market downturn, with many experiencing losses as the market corrected. The report suggests that the extent of these losses might indicate an overreaction, a common phenomenon in markets where emotional responses can drive exaggerated selling or buying behavior.
The upcoming Benzinga Future of Digital Assets event on Nov. 19 is expected to delve deeper into these dynamics, offering insights into how Bitcoin’s growing dominance could shape the future of the digital assets landscape.
