Reading Crypto Dominance Like a Cycle Map#

Crypto markets show interesting nuances when you review the market as a series of capital-rotation cycles. The dominance chart below, tracking 30-day moving averages of market share for BTC (orange), ETH (blue), and the rest of the market (green), summarizes that rotation over the last 10 years. Each spike in Bitcoin’s dominance signals capital piling into its perceived safety. After a spike in dominance, a decline reveals money migrating into Ethereum and other smaller tokens. Overlaying Bitcoin’s USD price (bottom panel) shows that these dominance reversals typically occur shortly after a major BTC rally, when gains consolidate and investors start looking for higher returns and diversification outside of BTC.

Concentration Is the Tell#

Every crypto cycle starts with capital concentration. Bitcoin rallies first, gathers media attention, and soaks up liquidity. Ethereum follows, narrowing the gap. Eventually, as the chart shows, the orange and green lines converge—Bitcoin’s dominance slips toward 40% while the “rest of market” share surges. That convergence has happened multiple times since 2017, and we appear to be approaching another rendezvous. The recent uptick in BTC dominance was hovering near the highs of the last cycle, and mirrors prior “calm before the rotation” periods. Ethereum’s share has already grown, and the green line (other coins) is curling higher as the orange line rolls over. History suggests that when Bitcoin’s share exceeds 50% for long, the market responds with a catch-up move in everything else.

Why It Matters for a Consumer-Driven Asset Class#

Unlike traditional equities, much of the crypto capital flow is consumer-driven. Retail enthusiasm and influencer narratives can redirect money in days. The dominance chart is a proxy for that crowd psychology. When Bitcoin monopolizes attention, the market feels orderly and institutional. When dominance collapses, the consumer dynamic reasserts itself: communities mobilize around alt narratives, liquidity fragments, and volatility explodes. That unique rhythm is why market caps rarely stay polarized. The crowd wants novelty, not just digital gold, so capital spreads out again—often violently.

Looking Ahead: Convergence on Deck?#

With macro liquidity improving and Bitcoin already logging a large advance, the setup looks familiar to the last cycle. Dominance readings as high as today have historically resolved with a rotation toward Ethereum and the broader market, pulling BTC’s share back toward the lower-40s or even 30s. If that convergence plays out, it will be another reminder that crypto behaves like a consumer product cycle, not a static asset class. For traders, that means staying patient while Bitcoin hogs the spotlight—and being ready to act when the crowd’s attention inevitably swings back to the rest of the spectrum.