Bitcoin Dominance Hits 60 Percent as Traders Shun Smaller Tokens

Bitcoin took a larger share of the crypto market this week as traders pulled back from smaller tokens. Bitcoin dominance, its share of total crypto market value, climbed to 60 percent on Wednesday, October 21. That was its highest level since May. It stayed near that level on Thursday, October 22, while the wider market weakened.

The move was not a rally in everything. Traders favored bitcoin over riskier coins. That is a defensive pattern. When buyers get cautious, they often hold the largest and most liquid coin and sell the rest first.

Smaller tokens take the hit

CoinDesk indexes showed the split clearly. The Memecoin Index fell more than 5 percent. The Computing Select Index fell 3.5 percent. The DeFi Select Index fell 2.5 percent.

Over seven days, the picture was calmer for the biggest names. Bitcoin, ether, XRP and solana were little changed to positive over the week. Zcash stood apart. It was the only major coin up more than 10 percent on a seven day basis.

A choppy Thursday on price

Bitcoin gave back gains on Thursday. It slipped below $82,000 after approaching $85,000 in the prior session, with a high of $84,835 reported by Dow Jones data published by Morningstar, using LSEG figures.

Snapshots during Thursday differed by the hour. Morningstar reported bitcoin down about 2.2 percent to $82,799. A later CoinLab report put the fall at about 3.9 percent, with a low near $80,940. The two reports describe different moments in the same trading day, not a single closing price.

Liquidations and flows

Forced selling added to the pressure. Traders saw $412 million of long positions and $43 million of short positions liquidated across crypto in 24 hours, according to Bitcoin.com figures cited by CoinLab from Coinglass data. Bitcoin longs accounted for $135 million of that total.

Open interest stood at about $55.95 billion. J.P. Morgan estimated $23 million of inflows into spot bitcoin products on Tuesday. Total crypto market value was about $2.7 trillion, according to a Nexo brief cited in the reports. The inflow figure was small next to the liquidations, which helps explain why the tone stayed cautious even as money still moved into bitcoin products.

What traders are waiting for

Joel Kruger, a strategist at LMAX, said the earlier period when crypto outperformed has given way to a closer link with equities, as investors wait for a fresh catalyst. That link showed on Thursday, when bitcoin fell alongside pressure in technology shares.

For now, the story is structure, not a single price. Dominance at 60 percent says traders trust bitcoin more than the rest of the market in a weak week. It also says the rest of the market has work to do before buyers return in size.