Yes, an increase in Bitcoin Dominance (BTC.D) can be negative for altcoins and Ethereum (ETH), depending on the market conditions. Here’s why:
Why BTC Dominance Rising Is Bad for Altcoins & ETH:
Capital Shift to Bitcoin – A rising BTC dominance means that more money is flowing into Bitcoin rather than altcoins. This reduces liquidity and demand for altcoins, causing them to underperform or decline.
Altcoin Weakness – Historically, when BTC.D increases, altcoins tend to struggle or experience deeper corrections. Investors often move to BTC for safety in uncertain markets.
Lower Speculation on Alts – A high BTC.D suggests that the market is favoring Bitcoin over speculative altcoins, reducing the chances of major altcoin rallies.
Ethereum Underperformance – ETH is the largest altcoin, so a rising BTC dominance often leads to ETH underperforming against BTC. This weakens ETH’s market position relative to Bitcoin.
When BTC Dominance Rises But Altcoins Still Do Well:
If Bitcoin's price is surging, altcoins may still rise in USD terms but underperform compared to BTC.
If ETH and other alts show strong narratives (e.g., Ethereum ETF approval, Layer 2 growth), they may hold up despite BTC.D increasing.
Conclusion:
A rising BTC dominance is generally bearish for altcoins and ETH in the short term, as it signals that Bitcoin is absorbing most of the capital. However, once BTC stabilizes, altcoins may regain strength. Watch BTC price action and altcoin market trends for confirmation.