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March Market Review: Bitcoin Dominance Drops Below 60%, Returning to Levels Before the DeFi Coin Boom Last Year

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March Market Review: Bitcoin Dominance Drops Below 60%, Returning to Levels Before the DeFi Coin Boom Last Year

The cryptocurrency market has safely navigated through the traditionally poor-performing month of March this year. Despite Bitcoin recently surpassing $59,000 and showing momentum to challenge its previous high of $61,788, altcoins seem to be even stronger. Bitcoin's dominance has dropped below 60%, and Weiss Ratings believes that Bitcoin's dominant position appears to be coming to an end.

March Security Undercut

CoinGecko's former market analyst and author of the introductory book "How to DeFi," Darren Lau, compiled a dismal performance of Bitcoin in March in previous years at the end of February, noting a similar downward trend for Ethereum in the past.

Contrary to market concerns, Bitcoin has been on the rise since 3/1, never dropping below $50,000 since 3/8, and hitting a historic high of $61,788 on 3/14, currently rebounding from the low point on 3/25 to the $59,000 level.

Of note is that Bitcoin's dominance has dropped below 60%, which may signal the arrival of altcoin season.

Bitcoin Dominance at Six-Month Low

CoinMarketCap data shows that Bitcoin dominance is currently at 59%. The last time it fell below 60% was on 8/13 last year.

At that time, liquidity mining was hot, with Binance just announcing the listing of Yearn.Finance YFI on 8/10, and DeFi tokens were about to take off.

Orange Line: Bitcoin Market Cap Dominance Source: CoinMarketCap

Moreover, during the bull market in 2017, Bitcoin dominance dropped to 32.81% at one point, with most altcoins setting their historical highs for the year, while Ethereum's dominance reached 18.78% ranking second.

Rise of Altcoins and NFTs

Weiss Ratings also pointed out that while they continued to warn of a possible pullback last week, it has not happened yet. Instead, specific altcoins have consecutively hit historical highs, including Filecoin FIL and Theta Network Theta.

Bitcoin's dominant position has been growing over the past few months, but Weiss Ratings believes this situation seems to be ending, stating:

From "Saturday Night Live," it can be seen that cryptocurrencies other than Bitcoin are becoming mainstream.

Note: "Saturday Night Live" is a famous American comedy show, and the theme on the 27th was the recent hot topic of NFTs. In the skit, Kate McKinnon played U.S. Treasury Secretary Yellen, who was asked in class, "What is an NFT?" by students, leading to a series of interactions. The background was set to Eminem's MV "Without Me" to explain NFTs, even Elon Musk retweeted the video.

Market Performance in March

Although decentralized storage projects have surged recently, among the altcoins with the highest 30-day gains, the rising sectors are still somewhat scattered. Fan tokens like Chiliz CHZ, which were previously endorsed by Taiwan community leader Woody and Messari analyst Mason Nystrom, have seen nearly a 900% increase in March alone.

Despite market trends and Weiss Ratings' comments indicating that altcoins may outperform Bitcoin, Pantera and fintech startup Square remain bullish on Bitcoin in the long run.

Pantera believes Bitcoin has just entered a major adoption phase, with the institution predicting a price of $110,000 for Bitcoin in August; while Square's CFO recently mentioned in an interview that Square will continue to invest in and hold Bitcoin for the long term.