Altcoin trading volume has reached its highest point since January 2021. At the other extreme, Bitcoin trading volume is declining. According to data from CryptoQuant, Bitcoin’s dominance in trading is only 16% at the moment.
Volume Dominance is an indicator that measures the percentage of the total trading volume in the cryptocurrency market and can be broken down by currency or by sectors such as Bitcoin x altcoins.
When this indicator is going up for any cryptocurrency, it means that the cryptocurrency is seeing more activity than the rest of the market at the moment. This indicates that a particular currency is attracting more interest from investors at the moment.
On the other hand, lower values may indicate that the cryptocurrency is losing market share at the moment, as its volume percentage is declining. Here is a chart showing the volume dominance trend for the entire altcoin industry combined (excluding Ethereum), as well as Bitcoin, over the past two years:
The moment is attention
As shown in the chart above, Bitcoin’s volume dominance has declined significantly recently, touching a value of only 16%. This is the lowest value BTC has seen in the past two years.
On the other hand, Altcoins (excluding Ethereum) have seen their dominance rise in recent weeks, with the index now valued at 64%. This indicates that BTC has been losing market share due to these modifications recently.
But analyst Howen Kyuma calls the trend “extremely worrying”. He notes that this is due to the fact that whenever there are highs with altcoins trading at the top, they are generally short-lived and prices fall quickly.
This can be clearly seen in the chart. For example, the highs formed in 2021 (in the first and second half of the year) while altcoins had more volume dominance than bitcoin. FTX’s recent decline also occurred around the time it dominated alternatives on the market.
So, according to Kyouma, now is the time to care, not to celebrate.