The crypto giant appears to be losing its grip on the entire crypto market cap as its dominance fell below 40%, which was in the range of 45-50% during its golden days .
Bitcoin hit a lifetime high of $ 68,790 on November 20, 2021 and has corrected around 40% since then to a low of $ 42,761 on Thursday, January 6.
However, Bitcoin is not alone in suffering, as all major crypto tokens were trading lower on Thursday following the hawkish US Federal Reserve opinion, which hinted at a possible interest rate hike in March, earlier than expected.
But despite the weakness of the wider space and all major altcoins, Bitcoin has been a leading laggard with greater underperformance in recent times.
Bitcoin fell more than 8% last week, underperforming peers like Ethereum, Cardano and Ripple. To add to the woes, only three of the top 10 altcoins fared worse than Bitcoin, with a steeper drop.
No more pain in Bitcoin?
Experts believe that Bitcoin will consolidate in a range of $ 40,000 to $ 50,000 and if the $ 40,000 levels are broken it could fall further.
Hitesh Malviya, founder of itsblockchain.com, said Bitcoin is currently facing a downtrend and is witnessing the formation of a major bear cycle over a longer period of time.
“Bitcoin must contain $ 40,000 as a backing to avoid any further failure to $ 30,000 or less,” he added. However, Bitcoin will need to correct more than 20% of current levels for this to happen.
During the market correction and times of panic, traders tend to sell altcoins which are more volatile and take refuge in either stablecoins or behemoths like Bitcoin or Ethereum. However, this fact alone does not solve Bitcoin’s dilemma.
Ethereum to take back Bitcoin?
Commenting on Bitcoin’s weakness, Raj A Kappor, founder of the Indian BlockChain Alliance, said, “In my opinion, Ethereum will be the next Bitcoin.
The key advantage of Ethereum is its usefulness in the real world. Its blockchain supports smart contracts that can be used in a wide range of applications, he added. Improving Ethereum’s network could be a catalyst to attract more funds.
Ethereum is not as well known as Bitcoin and has generated superb returns over the past year, despite all the criticism regarding its speed and cost. It is less than 50% of pushing Bitcoin dominance to second place.
“If current trajectories continue, Ethereum could very well overtake Bitcoin as the most valuable cryptocurrency by 2022. Investors are keeping their eyes open,” Kapoor added.
Analysts refer to the battle for crypto’s top crown as “Flippening.” The rise in the ether’s market cap suggests that investors are looking for potential return opportunities beyond Bitcoin.
However, Malviya cautions Ethereum fanatics because he believes Ethereum can follow bitcoin’s lead. “Overall the market does not look so good, traders should avoid taking unnecessary positions,” he added.