Of course real building happens in bear markets, but bull markets fund it. In addition to selling more products in bull markets, alot of companies hold a significant amount of their capital in bitcoin.

As far as dominance, there are a few venture firms that are bitcoin only, but most are not. The higher the dominance, the more goes to bitcoin. All of the incentives for VCs will always be to funding altcoin projects, because it is the quickest way to get their returns. They don't need a working product, just a coin to pump and dump on retail. This can happen way faster than actual innovation can become profitable.

On the other hand, bear markets are disproportionatley hard on altcoins. As far as I know, no altcoin ever reaches a higher value in proportion to Bitcoin after its first bull cycle in any following bull cycle. (With the exception of Doge after Musk pumped it.) This may result in VC funding during bear markets to be a little more Bitcoin heavy.

If we don't count stablecoins, I don't think any coin (certainly none that currently exist) will ever get as close to reaching Bitcoin's value as ETH did after 2017.