Thursday, 28 March 2024
Trending

Crypto News

Bitcoin 7-month high ‘dominance’ has BTC price eyeing $25K — Will Ethereum spoil the rally?

Bitcoin 7-month high 'dominance' has BTC price eyeing $25K — Will Ethereum spoil the rally?

Bitcoin (BTC) is rapidly regaining its lost dominance in the crypto market so far into 2023.

On Jan. 30, Bitcoin accounted for 44.82% of the total crypto market capitalization, the highest since June 2022. In September 2022, Bitcoin’s dominance index was as low as 38.84%.

The index typically rises when most crypto investors reduce their exposure to smaller tokens and seek safety in Bitcoin. The reasons include Bitcoin’s better liquidity and lower volatility than alternative cryptocurrencies, or altcoins, primarily in a bear market.

Bitcoin’s market dominance to grow further?

As of Jan. 31, Bitcoin is up 38% year-to-date (YTD) at around $23,000. In comparison, the second-largest cryptocurrency, Ether (ETH), gained 30% in the same period, showing most investors remain gravitated toward Bitcoin so far in 2023.

From a technical perspective, the Bitcoin dominance index may rise further in the coming weeks as it reclaims its 50-week exponential moving average (50-day EMA; the red wave in the chart below) as support.

Bitcoin dominance index weekly performance chart. Source: TradingView

In doing so, the index could rise toward 48.5%, which has acted as resistance since May 2021. 

On the other hand, independent market analyst Rekt Capital sees the Bitcoin dominance index rising toward 46%, which coincides with the upper trendline of a giant descending channel pattern, as shown in the monthly-timeframe chart below. 

Bitcoin dominance index monthly performance chart. Source: TradingView, Rekt Capital

The short-term bullish scenario in the Bitcoin dominance index chart appears in line with a similar upside in the spot Bitcoin market, with bulls eyeing a run-up toward $25,000.

Ethereum vs. Bitcoin th main driver of BTC dominance

The bearish argument is that the Bitcoin dominance index may start losing its upside momentum after testing its descending channel resistance, as it had done on several occasions in the recent past.

Related: Bitcoin sees most long liquidations of 2023 as BTC price tags $22.5K

“Bitcoin Dominance is further overextending beyond red on the Monthly TF,” notes Rekt Capital while citing the index’s…

Click Here to Read the Full Original Article at Cointelegraph.com News…