I strongly suspect that dominance is inversely related to the BTC price, at least when looking at these large price movements in the short-term. So when BTC returns to $7k, I'd expect dominance to drop again. But it would be good/interesting if people are losing faith completely in the particularly worthless alts like XRP.
According to my observations , the dominance value is not directly related to price, but to the general market situation.
Altcoins tend to grow in a disproportionate way in the last stages of a Bitcoin bull market, and above all when Bitcoin already has hit its high and corrects sharply, and then some traders seem to search "refuge" in altcoins, driving up their price for a very short time (usually days, at most some weeks).
Would that be because of the misplaced over-confidence by traders that the bull market will go on longer than they thought?
I believe it is over-confidence and greed that traders move their Bitcoins to altcoins because take more risks and think that they can make profit more.
In contrast, in the latter half of the bear market, altcoins tend to crash heavily and lose almost all of their value. Many of them never see their position in the "market cap rankings" again, because in the next cycle usually new altcoins become the "divas" of the moment.
Would that be because of "capitulation" from altcoins? Most of the altcoins cannot be traded to fiat, but only with Bitcoin.
XRP, as much as I consider it a centralized coin with a concept that doesn't really make sense, seems to have established itself in the top altcoin positions, just like Ethereum - it's one of the few coins never having fallen out of the Coinmarketcap top 10, since 2013. I think this is related to its banking-oriented ecosystem of users. I don't know if that will change eventually and if better, more decentralized competitors could catch up.
What users? Hahaha.