Bitcoin's dominance is already rising, and some analysts think that investors will "cycle back into Bitcoin as uncertainty increases."
Bitcoin’s sharp rebound after yesterday’s bloodbath indicates that the world’s biggest cryptocurrency is more resilient than altcoins with a smaller market cap.
To make sense of this, it’s worth remembering that several altcoins have failed to bounce back after yesterday’s crash in the same meaningful way — and some now believe that we could start to see investment flow back into BTC, plunging the altseason into peril.
“If crypto was to crumble, BTC would be the last coin standing. Hence players in the space will keep dumping other cryptos in favor of BTC even if it’s the subject of a negative narrative.”
This narrative was also reinforced by Stack Funds’ head of research Lennard Neo. He described Wednesday’s activity as the “largest reset since March 2020,” adding:
“We believe the rotational playbook has reversed as dark clouds loom over the markets. We are expecting investors to cycle back into Bitcoin as uncertainty increases and the markets undergo another reset. Hence, a bounce in Bitcoin dominance should occur, further supporting Bitcoin’s price in the short-term.”