SKN | Bitcoin Dominance Breaks the Norm — Drops Even as BTC Slides Nearly 30%

The share of Bitcoin within the total crypto-market capitalization has fallen sharply even as Bitcoin itself plunges — a divergence that challenges typical market expectations. This shift is occurring amid a broader rout across digital assets, triggered by macroeconomic headwinds, risk-off sentiment, and regulatory uncertainty, with cascading effects on investor behaviour and capital flows.

Market Reaction: BTC Dominance Falters Alongside Price

In November 2025, the metric often known as BTC.D dropped from roughly 61.4% to about 58.8%. At the same time, Bitcoin’s price collapsed close to its lowest levels in seven months, slipping below the $90,000 mark.  Historically, such deep price declines coincide with a rise in dominance — as investors rotate from riskier altcoins into the “safer,” more liquid Bitcoin. The opposite happening now signals that capital is not simply retreating to Bitcoin — it’s either leaving crypto en masse or reallocating toward altcoins (despite rising volatility).

Implications for Market Structure and Liquidity

BTC dominance reflects Bitcoin’s share of the total crypto market cap. A declining dominance during a BTC price crash implies that either altcoins are outperforming relative to Bitcoin, or overall crypto liquidity is fragmenting. Given that many altcoins have lost value — in some cases more than Bitcoin — the numbers suggest a broader exit from crypto rather than an altcoin rally.

In dollar terms, the drop in Bitcoin’s market share is significant. One recent estimate put the shift at a loss of roughly $80 billion in relative market weight. This suggests a large-scale capital flight or major reallocation — a structural change rather than a simple rotation among assets.

Investor Sentiment and Strategic Behavior

This unusual drop in BTC.D amid a market-wide drawdown points to elevated risk aversion among investors. Rather than seeking relative safety in Bitcoin, many appear willing to exit altogether — a psychological shift triggered by macroeconomic uncertainty, disappointing returns, and concern over further downside. Institutions that built crypto-heavy treasuries earlier in 2025 now face underwater positions; some have reportedly started liquidating holdings to stabilize equity or debt metrics.

For more nimble or speculative players, this could signal a moment of opportunity — albeit risky — in selective altcoins or utility-focused projects. But overall, confidence remains fragile, and many market participants seem prioritizing capital preservation over speculative alternatives.

In the weeks ahead, the trajectory of BTC dominance will likely serve as a barometer for broader market sentiment. If dominance stabilizes or rebounds, it may reflect a return of capital seeking lower-risk, high-liquidity assets. If it continues to fall — especially along with Bitcoin price — the crypto market may remain trapped in a broader de-risking cycle. What happens next may depend heavily on macro factors such as interest-rate expectations, institutional liquidity, and regulatory clarity across major jurisdictions.