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Over the past few weeks, the cryptocurrency market has been at the stage of consolidation, while at the same time we are observing an interesting trend in the market. Bitcoin (BTC) price losses are reducing its dominance in the crypto space, which is now down to 37%.
At the same time, some altcoin projects are showing strength, including Chainlink (LINK), Terra (LUNA), Polygon (MATIC), Avalanche (AVAX) and others. This again brings us to the debate about whether Bitcoin is losing its grip on the market, giving way to new projects, or is it short-term speculation.
On the Bitcoin dominance diagram, it is clearly seen that since the beginning of 2021, this indicator has tended to decline. In fact, the dominance of the bitcoin market is approaching the 2018 lows.
Undoubtedly, speculation in altcoins is present, but other projects are gaining momentum. For example, it is clear that Ethereum (ETH) will expand its market dominance. Popular cryptanalyst Lark Davis is confident that this will become a trend:
In fact, there are many altcoins showing good strength, and bitcoin looks sad. The more the industry grows, the less the impact of BTC will be.
There are actually a lot of #altcoins showing good strength in spite of #bitcoin looking sad. The more the industry grows the less impact BTC will have on alts.
— Lark Davis (@TheCryptoLark) January 5, 2022
In 2017-2018, the movement in the altcoin market was heavily dependent on the movement of bitcoin (BTC). Can we say that something has changed now?
Yes, of course, since we have witnessed the emergence of innovative projects on the market for decentralized finance (DeFi), DEX and NFT, etc.
At the moment, bitcoin has consolidated its position as a store of value, other crypto projects are helping to apply new technological solutions.
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