Bitcoin is still the most popular cryptocurrency more than a decade after its launch in 2009, and the first-mover advantage has afforded it many opportunities. For example, it is the most valuable cryptocurrency. It is currently worth $45,600 per Bitcoin and it has maintained dominance over the cryptocurrency market.

Bitcoin dominance over the cryptocurrency market combined with its high price value is one reason why it has historically attracted a lot of trading volume. However, recent data suggests that it is currently losing its market dominance. Bitcoin’s market cap at the time of this press was $831 billion, while the market cap of the entire cryptocurrency market was just over $2.1 trillion. This means Bitcoin dominance is currently just over 40% of the whole market.

Why Bitcoin is losing its market dominance

Bitcoin dominance was as high as 70% earlier this year, a figure that was even closer to 90% in the first half of 2017, which means that it is quickly losing dominance. One of the prominent reasons is the influx of new cryptocurrencies such as Dogecoin that have gained popularity in the last few weeks. These new coins have been competing for market cap. Investors have been looking for alternative growth opportunities in the market, thus Bitcoin’s market share has decreased from around $1.5 trillion a few weeks ago.

Tesla CEO Elon Musk is one of Bitcoin’s stratospheric surge proponents in 2021 after his company purchased Bitcoin worth more than $1 billion. Musk’s Twitter posts responding to crypto enthusiasts have fueled speculation that the EV manufacturer might offload its Bitcoin holdings, thus triggering Bitcoin sell-offs in the last few days. Those sell-offs have consequently continued to decrease Bitcoin’s market cap, despite some reassurance from the techno king of Tesla that he does not plan to sell off his Bitcoin holdings.

Another possible reason for Bitcoin’s dominance eroding is that the competitors are innovating way faster and transforming their products and solutions into real-world uses. It’s no secret that Bitcoin transactions are way slower and more expensive than the likes of Cardano’s ADA for example. While Bitcoin may be touted as the “digital gold” of crypto, its daily practical use in facilitating transactions is lagging. Even Ethereum is closing the gap on Bitcoin with the plethora of dapps being built on the Ethereum network. Ehtereum currently has a market dominance of 19%.

 Bitcoin traded at $45,031 at the time of this press after a slight pullback from its 24-hour low of $42,196. Its prevailing bearish momentum commenced on May 9 after experiencing strong resistance at around $59,000. It tested resistance at around the $56,700 price level, but the bears overpowered the bulls, sending the price on a strong downward spiral that seems to have gained new support just above the $42,000 price level.

The cryptocurrency is still experiencing strong selling according to the volume indicator, and its price is already below the 7-day, 25-day, and 99-day moving averages.  The Stochastic RSI confirms the high selling volume. Meanwhile, the slight price pullback in the last 24 hours might indicate that the bulls are ready to push the price back up. However, its potential to continue on the downtrend should not be ignored.

The last time that Bitcoin traded significantly below the 99-day moving average was in March 2020, during which the price tanked to a low of $3812, after which the bulls took over. If history repeats itself, we might witness a substantial bear market before the market corrects itself. While we all want Bitcoin to keep growing, it will be great to see altcoins progress without being swayed by what’s happening to Bitcoin. Only time will tell…