Bitcoin Market Dominance Reaches 3-Year High—What's That Mean?

“The price is climbing toward the midpoint of this range, but it has not yet established a decisive breakout," one analyst told Decrypt.

With inflows into Bitcoin spot exchange-traded funds having continued for the fourth consecutive day, experts say that the rising Bitcoin dominance—along with record-high open interest and shrinking exchange reserves as indicators—could signal a potential bull run.

Speaking to Decrypt, experts have highlighted that Bitcoin’s market dominance has surged to 58%, its highest level since April 2021, and underscores its growing strength.

One big factor in the surge has been growing institutional interest. Bitcoin spot ETFs saw $458.5 million in net inflows on October 16, marking four consecutive days of positive flows.

BlackRock’s (IBIT) ETF accounted for $393 million of the total, while Fidelity’s FBTC saw inflows worth $14.8 million. While there were no outflows, Grayscale’s GBTC, Grayscale’s BTC fund, Wisdom Tree’s BTCW and Hashdex’s DEFI saw no inflows, according to data from SoSo Value.

The total fund inflows in spot Bitcoin ETFs over the last four days now stands at $1.6 billion.

In the same 4-day period, Ethereum spot ETFs have added $28.4 million. Yesterday the funds saw inflows of $24.2 million, with BlackRock’s ETHA raking in $11.89 million worth of inflows, data shows.

Georgy Slavin-Rudakov, CMO at B2BINPAY, told Decrypt that Bitcoin’s metrics signal sustained momentum, though the market remains within a defined range.

“The price is climbing toward the midpoint of this range, but it has not yet established a decisive breakout, which keeps the door open for potential declines back to lower levels,” he said.

Despite this, Slavin-Rudakov expects the Bitcoin price to break out of its range by late 2024 or early 2025, driven by strong market dynamics and investor confidence.

The positive sentiment in the crypto market aligns with broader trends observed in September, according to Binance Research.

The total market capitalization for cryptocurrencies grew by 8% last month, supported by macroeconomic improvements such as the Federal Reserve’s interest rate cuts and China’s liquidity injections.

In a note shared with Decrypt, Dary McGovern, Chief Operating Officer of Xapo Bank said the increased global adoption of Bitcoin has helped its market cap reach $1.3 trillion.

But the so-called digital gold, has a ways to go before it catches up with actual gold. But McGovern thinks Bitcoin can do it, even though precious metal currently has a market cap of $18 trillion.

“With the supply of Bitcoin capped at 21 million, combined with growing global demand and increased pressure on the Fed to debase the value of the dollar to manage debt," he said. "I expect the market cap of Bitcoin to eventually surpass that of Gold, creating significant upside potential from current prices."

Edited by Stacy Elliott.

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