Bitcoin dominance nears multi-year high amid Libra memecoin collapse

Bitcoin's market dominance has surged to approximately 60%, marking a 5% increase over the past month and a 12% rise over the past year. This rise coincides with significant volatility in altcoins like Solana, which have experienced notable price fluctuations. Analysts attribute the collapse of the Libra memecoin to a significant erosion of investor confidence, which has intensified the trend of reallocating investments into bitcoin.

"Bitcoin dominance is now over 60%, reflecting the increased consolidation of institutional sentiment and the growing role of professional investors in digital assets," TP ICAP Digital Assets Sales Director Hina Sattar Joshi told The Block. In contrast, Solana has faced recent challenges, with the digital asset now trading around the $185 mark — reflecting a decrease of approximately 4% over the past day, according to The Block's Price Page .

The altcoin market remains heavily retail-driven, leading to sharp price swings, Joshi observed. "The downturn in alts is a reflection of institutional capital flowing into bitcoin, which is now seen as a stable investment relative to other digital assets," she added.

The recent launch and subsequent collapse of the Libra token, endorsed by Argentine President Javier Milei, significantly undermined investor confidence, the analyst added. The token's value plummeted after the team apparently sniped its own launch , contributing to a market capitalization loss of approximately $4 billion within hours.

New catalyst need to lift bitcoin out of current range

Over the past week, bitcoin's price has remained relatively stable in comparison to major alts, trading within a narrow range between $95,000 and $97,000, according to The Block's Price Page .

Analysts suggest that bitcoin's current price consolidation may persist until a significant catalyst emerges. "With no significant crypto-specific catalysts in sight, price action appears to be more macro-driven, particularly as the correlation between bitcoin and equities remains largely intact," QCP Capital analysts said.

Medium-term prospects for bitcoin are closely tied to institutional inflows, particularly through spot bitcoin ETFs, and the ongoing effects of the 2024 halving, analysts said. "A sustained hold above critical support levels, coupled with positive ETF activity, could catalyze a push toward $100,000 or higher by the week’s end," Bitget Research Chief Analyst Ryan Lee told The Block. "Market participants are closely monitoring institutional adoption trends and macroeconomic factors, which continue to shape bitcoin’s trajectory."

Derivatives market shows decreased implied volatility

In the derivatives market, QCP Capital analysts observed implied volatility is decreasing. "With bitcoin comfortably back in the middle of the range, implied volatility continues to drift lower, which comes as no surprise given that seven-day realized volatility has dipped to 36v," QCP Capital analysts said.

They added that despite macro uncertainties, such as tariffs, debt ceiling, inflation, and political unpredictability, crypto implied volatily and the VIX are still trading at their lows. "Bitcoin has proven to be relatively unfazed by the recent macro data, and open interest has not recovered significantly after the January month-end expiry, and this suggests that the crypto options market is just waiting on the sidelines for concrete policy changes rather than just pro-crypto rhetoric," the QCP Capital analysts added.

The analysts observed that the cryptocurrency market is currently indecisive about engaging in long-term options strategies, even with volatility at present levels reminiscent of the second and third quarter from 2024, when bitcoin remained confined within a multi-month trading range. "Instead, trading activity is predominantly focused on short-term volatility selling and range-bound strategies, rather than positioning for significant breakouts," QCP Capital analysts added. "This cautious approach suggests that market participants are awaiting concrete policy changes or catalysts before committing to more directional bets."