Bitcoin Dominance Surges to 57%: Is a Repeat of 2020’s Rally on the Horizon?

Bitcoin’s (BTC) market share and trader activity has risen, increasing Bitcoin’s dominance from 54% in December to 57% in January.

According to Glassnode, the same trend happened with the 2020 cycle, bottoming out at ~60% in November 2020 and climbing to 69% in January 2021.

During the last cycle, Bitcoin’s dominance reached the peak level of 72% where it rose from the prior all time highs, which saw its price double.

According to analysts, the present increase in dominance could mean a possible rally, though if there is a decrease of dominance in the future, it signifies a move to altcoins due to changing market sentiment.

On-Chain Indicators Signal a Possible Market Top

For the first time in eight months, the Index of Bitcoin Cycle Indicators (IBCI) by CryptoQuant has entered the distribution area.

This index, comprising seven vital metrics around Puell Multiple and MVRV, NUPL and SOPR, implies the market is near a cycle top.

– Advertisement –

In fact, the IBCI still remains below 100%, which is telling us that there is still some room out there in the market to grow, but you better be cautious.

Other indicators like NUPL are nearing the upper zone, and the Puell Multiple is close to the lower zone, offering a mixed outlook, as analysts point out.

Bullish momentum should continue for as long as the IBCI remains above 50 percent, only with mild corrections.

Large Bitcoin Transactions and Institutional Activity Rise

According the crypto analyst Ali, the amount of large Bitcoin transactions ($100,000+) has doubled in the past week, from 15,620 to 32,320.

With BTC price nearing the $105,000, the date January 20 registered a high of 30,320 transactions, becoming a seven-day high.

The increase in large transactions indicates that institutions and the high net worth individuals are growingly interested.

In fact, such activity usually precedes a major market movement, by allowing large players to position themselves in anticipation of a price surge.

U.S. Bitcoin Holdings Add to Market Uncertainty

According to information from bitcointreasuries.net the U.S. government holds about 200,000 Bitcoin worth $21 billion.

Law enforcement efforts to take assets from illegitimate online exchanges generated the U.S. government’s cryptocurrency stockpile.

President Donald Trump gave orders for evaluations of these holdings’ potential uses but their exact details never came to light.

The resulting Titanium Bill introduction by Republican Senator Cynthia Lummis suggested governmental management of a Bitcoin reserve through the Treasury yet has failed to attract significant backing.

People cannot be sure if the government will buy Bitcoin from public marketplaces yet this uncertainty allows people to speculate how markets might develop.

Bitcoin dominance is growing along with institutional investments and U.S. government crypto reserves which together shape an advancing Bitcoin story for 2025.