Bitcoin dominance hits 54% – Highest in 2.5 years as BTC halving approaches

Bitcoin’s (BTC $34,350) market dominance has reached 54%, its highest in the last 30 months, indicating the top cryptocurrency is strengthening just before the halving event scheduled for April 2024.

The Bitcoin halving is an event in which the mining reward per block is halved, thus cutting the supply of the asset amid growing demand and leading to bullish price momentum. The Bitcoin halving occurs every four years, and the next halving in 2024 will reduce the BTC mining reward from the current 6.25 BTC to 3.125 BTC. As the total supply of Bitcoin is fixed at 21 million, the halving of BTC mining rewards creates a supply-demand gap that lowers the influx of new BTC into the market.

Bitcoin market dominance is a measure of the crypto asset’s market capitalization relative to the overall digital asset market and highlights the asset’s strength. The market dominance of over 50% is considered highly bullish and marks its highest point since the last bull run in April.

Bitcoin market dominance chart. Source: TradingView

Bitcoin’s market dominance began reviving at the start of October, when it rose from below 49% to reach this new two-and-a-half-year high. October has been historically considered a bullish crypto month, leading to the nickname “Uptober.” This was evident from Bitcoin’s double-digit percentage surge over the past few weeks, helping BTC rise from just below $27,000 at the start of October to post a new yearly high of $35,000.

In 2017, Bitcoin maintained a market dominance of over 80%, followed by Ether (ETH $1,837) with nearly 10%–17% in market dominance. Over the years, Bitcoin has seen a steep decline in its market dominance owing to the rise in the number of cryptocurrencies and the growth of several new tokens during the last bull run in 2021.