## Three days ago I wrote a post about a pattern that I had observed in the BTC dominance chart
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https://steemit.com/cryptocurrency/@bitbrain/what-is-this
It was news to me, and I have still not found anyone else who has carried out any form of technical analysis on the subject. I did not know what caused the pattern, but I think that I'm now starting to understand it. This post will share my latest thoughts in that regard.
My thanks to those who commented on my previous post. It all helped me to think in different directions and see new facets of the problem, even if I may have disagreed with what you said.
# Bitcoin Dominance - Part 2 - The "Why"
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The chart above shows BTC dominance. I'm not going to go over the patterns and remarkable features again, those were discussed in the previous post linked to in line 1.
## A little more insight, the beginning of an answer
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To continue my investigation into the BTC dominance pattern, I looked at the dominance patterns of other major coins and I found that the other major coins don't share BTC's dominance pattern:
1. BCH and DASH have no obvious pattern.
2. LTC and Monero continue to spike and dip in a fairly regular pattern with LTC having a gradual upwards gradient.
3. IOTA and NEO are unpredictable but generally climb well.
4. XRP and NEM have similar patterns. They tend to reach their highest points slightly *before* BTC reaches its low points.
5. ETH has a fairly strong inverse correlation with BTC, it reaches its high points when BTC reaches its low points and vice versa. The correlation is weakening.
6. All other altcoins have a *very* strong inverse correlation with BTC and that correlation is strengthening.
The altcoin link to BTC is by far the strongest. Look at this chart:
The line I drew on the chart acts as a sort of a boundary, evenly separating the BTC and Altcoins lines which almost mirror one another along that axis.
## What does this mean?
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It means this: BTC has been losing ground to the sheer number of altcoins. It isn't really the big coins stealing its market share so much. I think that this has come about due to the revolutionary technology of blockchains in general. Blockchains are increasingly finding new applications for themselves, worming their way into various facets of our everyday lives. At least that is what they will once everything is up and running properly, for now they are just positioning themselves to strike.
I do ***not*** see this situation changing any time soon. The effect of increasingly deploying blockchains for a variety of uses other than just for BTC, means that BTC will continue to lose dominance. This will not turn around at any stage. It is therefore imperative to realise that BTC will ***never*** regain it's once massive dominance.
Being linked to a financial market of sorts, we can expect the wave nature of these occurrences to continue. The waves will be caused by people having the perception of BTC being overvalued/undervalued relative to the rest of the altcoins at the time. Interestingly, I no longer expect some sort of cataclysmic market dominance event when we reach the apex of this sideways triangle: (as referred to in the previous post):
I think that from that point on we can just expect smaller, more mature waves. I envision something like this:
Eventually the waves will cross and BTC dominance will dip below the altcoin dominance horizon, never to re-emerge. 🌅After this the "mirror axis" line may start to dip downwards and BTC dominance may continue to decrease. That will all depend on how well BTC itself succeeds as a universal currency and how much competition is has. If it becomes the de facto global payment solution and also has no surviving competitors, then BTC will probably not lose market share any further. Until then, it will.
Yours in crypto,
Bit Brain
https://steemitimages.com/0x0/https://steemitimages.com/DQmcGTgE9ztQ7QmWESyE7uVqLrUqfbAa1fsTCod6dmsFYjP/endbanner.gif
* All charts from https://coinmarketcap.com/charts/. All chart modifications by @bitbrain.
DISCLAIMER:
***I am neither a financial advisor nor a professional trader/investor. This is not financial advice, investment advice or trading advice.*** Unless otherwise stated, all my posts are my opinion and nothing more. ***Crypto is highly volatile and you can easily lose everything in crypto. You invest at your own risk!*** Information I post may be erroneous or construed as being misleading. I will not be held responsible for anything which is incorrect, missing, out-of-date or fabricated. Any information you use is done so at your own risk. Always Do Your Own Research (DYOR) and realise that ***you and you alone are responsible for your crypto portfolio*** and whatever happens to it.