Bitcoin Dominance on a Decline for 8 Weeks Straight to Hit Three-Year Low

Time and again, the Bitcoin price will make a strong upward movement, but instead of continuing the momentum, it ends up back down again. As of writing, BTC/USD has been trading around $57,500.

It has been due to lack of momentum in Bitcoin and the surging Ether prices, which hit a new all-time high yet again at $3,550 and 0.06348 BTC, that the dominance of the leading cryptocurrency continues to decline. ETH -1.11% Ethereum / USD ETHUSD $ 3,488.63
-$38.72-1.11%
Volume 44.11 b Change -$38.72 Open $3,488.63 Circulating 115.77 m Market Cap 403.87 b
8 h Tala Partners With VISA To Drive USDC Adoption in Emerging Markets 9 h Bitcoin Dominance on a Decline for 8 Weeks Straight to Hit Three-Year Low 10 h Uniswap V3 Recording $265M in Liquidity and $70M in Volume After Going Live on the Ethereum Mainnet

Bitcoin dominance has been declining throughout this year, so far, and for seven straight weeks, it has printed only red candles.

On Dec. 28, 2020, BTC dominance was at 73.67%, which has now fallen to nearly 45%, last seen in mid-July 2018. The lowest it even went down was at 35.5% on Jan. 8, 2018, when altcoins peaked during the last bull market.

image1

Since the beginning of 2017, when initial coin offerings (ICOs) first became popular in the market, Bitcoin dominance has been on a decline. The metric, however, has become meaningless over time, noted Qiao Wang.

“BTC dominance is now at ~45%, and is probably heading lower,” because of a combination of reasons including the success of Ethereum and other smart contract crypto-commodities, the proliferation of crypto-equities, and froth, he added.

Party to Continue

With Bitcoin price around $58,000, Ether around $3,500, and the total crypto market cap on its way to hit $2.5 trillion, we are experiencing a bull rally, which according to some, could very well be a super cycle.

While that remains to be seen, the ongoing lack of momentum in Bitcoin along with other risky assets is the result of inflation expectations keep on rising and bond yield having stalled, which has real rates falling and deep into negative territory, said Charlie Morris, founder of ByteTree.

“It’ll be back when yields turn up assuming inflationary pressures remain,” he added.

This week, as we reported, Treasury Secretary Janet Yellen, who previously served as the chairman of the Federal Reserve, spooked the market with the talks of raising the interest rates to prevent overheating of the economy.

But Yellen does not directly impact rates in her current position, and the markets have recovered nicely since then.

It is Fed Chair Jerome Powell who is in charge, and he remains dovish as he has repeatedly said that rates will be kept low at zero and inflation target 2% until full employment and economic recovery is achieved.

So, “the party will continue for as long as the fundamentals stay the same,” writes analyst Mati Greenspan.

Read Original/a>
Author: AnTy

Related Articles