Bitcoin Drops 36% in Rapid Correction, Dominance Falls Unexpectedly
Bitcoin (BTC) has now experienced three declines of 30% or more in the current cycle, but the latest correction is notable for its unusual effect on BTC dominance. Unlike prior sell-offs, bitcoin’s market share fell instead of rising, defying the typical pattern observed in risk-off periods.
BTC tumbled to nearly $80,000 last week, a 36% drop from October’s all-time high above $126,000. The decline occurred amid a broad market deleveraging, with altcoins showing relative resilience.
Bitcoin dominance—which measures BTC’s share of total crypto market capitalization—usually rises during sell-offs because altcoins tend to fall faster. While this pattern held in October, since early November, dominance has slipped. Even during BTC’s recent rebound to $90,000, dominance fell from 61% to as low as 58.5%, recovering only slightly to just over 59%. In most risk-off environments, dominance typically climbs more sharply.
The contrast with prior corrections is striking. During the February–May “tariff tantrum,” dominance rose from 58% to 65%, and during the August 2024 yen carry-trade unwind, it climbed from 56% to 60%. The muted dominance shift this time suggests bitcoin was hit harder than the broader crypto market.
The speed of the decline also stands out. The current drawdown lasted 47 days from peak to trough, compared with 77 days during the tariff tantrum and 146 days in 2024, amplifying market fear.
Overall, the combination of a fast price drop and declining bitcoin dominance indicates this correction diverged from previous cycles. As bitcoin approaches the end of its typical four-year cycle, investors are watching closely to see whether falling dominance signals further weakness ahead.
