Cryptocurrency markets tend to vacillate between bitcoin-led regimes and altcoin-led regimes.
The altcoin-led regimes are called “alt seasons.” Ether’s rapid rise since the start of the year has put 2021 so far firmly into alt season, following a the fourth quarter of last year that was led by bitcoin.
The methodology is simple: A shift into a bull or bear market is defined as a bitcoin price change of 20% or greater, followed by at least 90 days during which the price does not return to its level before the change.
But at $4,000 ETH and $55,000 BTC, the gap between ether and bitcoin puts 2021 crypto markets at the edge of any altcoin season precedent.
But if the alt-season gap between ether and bitcoin widens further, we’re likely to begin to see an erosion of bitcoin’s viability as a market benchmark.
Bitcoin dominance is the ratio of bitcoin’s market cap to the sum market cap of all cryptocurrencies.
If the trend continues, eventually we’ll be looking for broader data sources as benchmarks for the market – the CoinDesk Digital Large Cap Index, for example.
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