Bitcoin's Dominance Breaks 63%, Setting New Cycle High, Yet Two Key Indicators Sound Bear Market Alarm
The cryptocurrency market is witnessing an epic capital game. By June 2025, Bitcoin's dominance (BTC.D) soared to a historic high of 63.13%, with a market cap exceeding $2.09 trillion, asserting absolute dominance over the entire cryptocurrency market valued at $3.43 trillion. However, beneath the halo, a recent report from 10x Research reveals that two key indicators have flashed bear market warning signals, suggesting that a market turning point may quietly approach.
1. Three Pillars of Soaring Dominance
Policy Tailwind Ignites Institutional Engines: The Trump administration appointed cryptocurrency supporters to lead the SEC and pushed for the establishment of a 'National Strategic Bitcoin Reserve', completely reversing regulatory expectations.
Digital Gold Attributes Certified by Traditional Capital: Fidelity Investments' research shows that Bitcoin's Sharpe ratio risk-return metric is nearing that of gold, demonstrating remarkable resilience during heightened volatility in U.S. stocks.
Technical Bull Market Support Zone is Unbreakable: The 20-week moving average and the 21-week exponential moving average of BTC.D form a dynamic support zone, with three strong rebounds in June and December 2024 and May 2025. The most recent was on May 14, when the dominance rebounded from 61.93% to 64.9%, highlighting Bitcoin's status as a 'safe haven' amid market panic.
2. Warning Indicators Reveal Market Fractures
Just as capital frolics, two hidden indicators sound the alarm:
Liquidity Undercurrents Drying Up: The total market value of stablecoins has plummeted by 37% from its peak in 2024, and the funding pool, acting as the market's 'invisible fuel', is shrinking. On-chain data shows a net outflow of 15,700 bitcoins from exchanges, with total balances dropping to 2.2 million, indicating clear signs of large buyers retreating.
Market Value to Realized Value Ratio Hits Warning Line: This indicator currently climbs to 3.7—historical data shows that this value typically corresponds to the cycle peak of the crypto market. When prices significantly deviate from on-chain actual value, the market faces heightened correction pressure.
3. Market Divergence Under Long-Short Game
The market shows a rare divergence in future trends:
Bitcoin Extremist Faction: XBIT analysts emphasize that as long as BTC.D maintains support in the bull market zone, the altcoin season will struggle to initiate. The Fear and Greed Index and Google search trends have reached a historical peak of 79%, indicating that retail investors are still entering the market.
Short Trap Theory: Crypto Rover observes that a historic short trap is forming. After Bitcoin plummeted to $58,000 on June 20, it quickly rebounded to $60,200, accompanied by an 18% surge in trading volume, with the RSI rising from the oversold zone of 28 to 35, forming a typical reversal signal. However, the sustainability of this rebound still depends on macro liquidity—the correlation between global M2 supply with a three-month offset and Bitcoin prices will be a key variable in testing the $100,000 threshold.
4. Investor Strategy: Defending Against Risks in Certainty
In the face of contradictory signals, savvy investors are diversifying their strategies:
Bitcoin Position Hedging: Institutions like BlackRock are using ETF shares as collateral to sell put options at the Chicago Options Exchange, achieving 'zero-cost positions'. At the same time, they include Bitcoin in their S&P 500 hedge portfolios, suppressing historical high volatility.
Leverage Discipline Strengthened: Asian retail investors are engaging in high-risk behavior with 125x leverage chasing MAGA meme coins, contrasting sharply with the prudent operations of institutions in Europe and the U.S. When the futures funding rate exceeds 0.1%, caution should be exercised regarding forced liquidation risks.
Timing Indicators Monitoring: In addition to the MVRV ratio, net flow from exchanges, active address count, and Coinbase App Store rankings are effective indicators for assessing retail investor entry.
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