Bitcoin’s share of the broader crypto market could take a significant hit over the coming months. Yet this change would make an enormous difference in how we view and apply cryptocurrencies. Typically, when Bitcoin dominance goes down, it signals that the wider altcoin market is beating Bitcoin’s performance. This change creates unprecedented prospects for altcoins to gain a foothold. Today, Spot Bitcoin ETFs are recently arriving on the scene. Institutional adoption has never been greater. Together, these changes produce entirely different dynamics that distinguish today’s market from previous cycles.

Technical Analysis Points to Potential Shift

>A new technical analysis on TradingView is raising the alarm bells about a Bitcoin collapse in market share. It has the potential to fall to 40% within months. Our analysis indicates that we are on a course for history to repeat itself. This would result in a higher bound increase to 46%, or the more pessimistic lower bound of 40.5%. As per this weekly candlestick chart, we can see that Bitcoin dominance is approaching a key and potentially significant historic resistance level. This trend increases the odds of a dramatic crash.

If Bitcoin dominance were to fall, proven cryptocurrencies such as Ethereum, XRP, Cardano, Chainlink, BNB and Litecoin will naturally be in the best position to gain first. These alternative cryptocurrencies known as “DINOs” (Dinosaurs In Name Only) have proven their mettle over several bullish and bearish market cycles.

Impact of Spot Bitcoin ETFs and Institutional Adoption

The market is undergoing a fundamental change with the adoption of Bitcoin by institutions on the rise. That momentum has been completely driven by the approval of Spot Bitcoin ETFs. Spot Bitcoin ETFs absorb a significant fraction of long-term liquidity, so there’s only so much capital that will flow into altcoins and how far they go. Unlike the market cycles of 2017 and 2021, capital is flowing much more conservatively into altcoins. In those halcyon days, investors confidently funneled their cash elsewhere on the crypto market.

That current market is a far cry from the bullish markets in 2017 and 2021. This change has been fueled largely by the launch of Spot Bitcoin ETFs and deeper institutional adoption. A Bitcoin dominance drop is almost always positive for altcoins. The massive liquidity that would be locked into Bitcoin through these ETFs might extinguish that comparative advantage.

Altcoins Eyeing a New Phase

If this indeed the case, the expected decrease in Bitcoin dominance may just be the start of a new stage of this market cycle. As Bitcoin’s dominance continues to fade, altcoins may slowly make themselves more appealing to investors. Such a shift would likely catalyze further institutional investment and reignite interest in the broader altcoin market. That’s premised on the assumption that the locked liquidity in Bitcoin ETFs is an unavoidable obstacle.