Bitcoin Dominance Surges - So Why Are These Two Indicators Flashing Bear Market?

Actionable Market Insights

Why this report matters

While Bitcoin dominance has surged to a new cycle high, two critical indicators are flashing early signs of broader market stress. Ethereum, once riding a wave of ETF optimism, is now unraveling under the weight of overleveraged futures positions. See June 5 report: Is Wall Street Really Warming Up to Ethereum? The Truth Behind ETH ETF Inflows (here).

Bitcoin Dominance (LHS, %) vs. Crypto Market Cap (RHS, $ trillions)

Meanwhile, (market-based) liquidity, a silent driver of every rally, has quietly started to dry up. Even stablecoin flows, often overlooked, are painting a telling picture as we head into summer. Some of the market’s biggest buyers are pulling back, and key technical levels are now being tested. What’s driving this stall—and what happens if support doesn’t hold?

Main argument

As anticipated, both Bitcoin and Ethereum are undergoing corrections, with each signaling a shift from bullish to bearish trends. In our report heading into the weekend (here), we highlighted Ethereum’s vulnerability to breaking below $2,420—a scenario that is now playing out. However, two critical indicators are on the verge of flipping bearish for Bitcoin—an inflection point that could have broad implications across the entire crypto market, including Ethereum.