Looking at the recent market situation, the dominance of BTC have a destruction factor with taking the huge percentage of money flowing into cryptocurrencies. Bringing back the smart money to altcoins will take a lot of time and money due to the fact that many investors lost the confidence.
3-4 years back, the Bitcoin dominance was close to 90%. But after that it declined and reached the rock bottom of 33% sometime in 2017-18 (when the ICO craze was at its peak). Now once again the market share of Bitcoin is growing. So rather than Bitcoin taking the market capitalization away from the altcoins, we can say that BTC is simoly regaining the market share it lost previously.
Yes, the percentage of price dominance of Bitcoin does not stand still, it can fall and rise. Therefore, if Bitcoin does not maintain competitiveness in relation to another cryptocurrency, its level of price dominance will inevitably fall. Many altcoins already have better functionality than Bitcoin. Therefore, if nothing changes, Bitcoin will lose both popularity and price dominance.
The situation with the price stagnation of altcoins has dragged on for a long time, such a long-term state of the cryptocurrency market is not beneficial to anyone. Therefore, I think that the market will find a way out of this difficult situation and altcoins will still attract the attention of investors.
On the contrary, we have seen Bitcoin lost it's dominance during the bull run. But still it remain as the number one crypto and everyone seems to enjoy it. Yes, although it did manage to also stay with Bitcoin, like Ethereum and XRP, the worsening market conditions put a dent on most of them.
Bitcoin is just around 60% of it's all time high, but most altcoins are 90%, so even it Bitcoin or a lot of altcoins as you describe have better functionality than Bitcoin, still investors prefer it at this bearish market. So nothing has change really, whatever cycles we have, Bitcoin will dominate.