Bitcoin’s metrics suggest bull market is far from overvalued

November 27, 2024 Coin Telegraph

Under-the-Radar Crypto Exchange Challenging Coinbase’s Dominance in US, According to Kaiko Research

July 24, 2024 The Daily Hodl

Will Bitcoin bulls or bears benefit from this week’s $9.25B BTC options expiry?

June 26, 2024 Coin Telegraph

Bear

The Bitcoin halving hype has long passed, and this month’s massive options expiry provides insight into the future of the current BTC bull market.

A total of $9.25 billion in Bitcoin (BTC) options is set to expire on the morning of June 28. June’s monthly expiry is especially important given that it marks the end of the first half of 2024 and historically is the second largest expiry in every market, including the traditional finance industry. Investors are especially concerned after the $3 trillion tech giant NVidia traded down 12% since its all-time high on June 20.

It has been two months since the Bitcoin halving, which likely explains why 57% of the bullish bets have been placed at $70,000 or higher. But, in reality, the market displayed weakness in the past two weeks, making those call (buy) options essentially worthless. If Bitcoin remains near $61,500 on June 28 at 8:00 am UTC, the rights to buy BTC at $62,000 and $64,000 will not take part in the expiry. Similarly, put (sell) options at $58,000 and $60,000 are rendered null.

Bitcoin bulls have weak macroeconomic data on their side, which favors a more aggressive rate cut and monetary stimulus campaigns from the United States Federal Reserve and Department of Treasury. Sales of new U.S. single-family homes dropped to a six-month low in May, down 11.3% from the prior year. More concerningly, at the current sales pace, it would take 9.3 months to clear the new houses supply, up from 8.1 months in April.

Regulatory clarity will drive the next bull run — hedge fund co-founder

September 21, 2022 Coin Telegraph

Bull

As long as the regulation gives an institutional investor a very clear path to crypto, they’ll jump into the space, hedge fund co-founder CK Cheng told Cointelegraph.

A former head of risk at Credit Suisse believes the next crypto bull market will stem from “regulatory clarity” in the United States — which he expects to happen in early 2023.

Speaking to Cointelegraph, the former head of valuation risk at Credit Suisse, CK Cheng said some of the regulatory efforts underway in the United States will soon “open the doors” of traditional finance to crypto.

Cheng is a former executive at investment bank Credit Suisse who left his role in July 2021 to co-found ZX Squared Capital, a crypto hedge fund targeting family offices and high-net-worth individual clients.

Cheng said there has been a recent sea change in traditional institutions’ stance towards crypto, with many dipping their toes into the crypto waters for the first time.

In August, one of the world’s largest asset managers BlackRock partnered with crypto exchange Coinbase to provide its institutional clients access to Bitcoin (BTC) and crypto through Coinbase Prime.

More recently, several major names in finance teamed up to create a digital assets exchange serving institutional and retail investors, which is being backed by financial giants including Charles Schwab, Citadel Securities, and Fidelity Digital Assets.

“Nowadays, you see a lot more traditional finance institutions getting involved in the crypto space [...] You can see tremendous interest,” said the hedge fund manager.

Cheng also emphasized that there are many more “waiting for regulation in the U.S. to be further clarified,” before jumping in:

“That will really open the door for traditional financial institutions, you know, bring a lot more institutions, investors into the space. So I would say that's gonna be how the next bull market will start.”

He also believes the Executive Order from U.S. president Joe Biden earlier this year has been a major signal for traditional investors, though admitted the “devil is in the details” when it comes to how crypto trading will be regulated, and whether a cryptocurrency will be considered a commodity or a security.

“From an institutional perspective, as long as the regulation is clear, that gives an institutional investor a very clear path to see they don’t trip themselves into regulatory issues [...] that will bring institutional investors into the space,” he added.

Asked when the tipping point will occur, Cheng said he expects regulatory clarity to be “fleshed out” sometime early next year.

“So hopefully, by early next year, there's something much more concrete. And that will help, you know, the market in terms of sentiment in terms of people's perception [of crypto]. I think regulation will help with that.”

Asked about how BTC prices will move over the near term, Cheng says he expects October to be a “very volatile” month for BTC.

“October is a pretty volatile period of time, especially when combined with high inflation, with a lot of debate in terms of the Fed and policy change. The concern is that if the Fed tightens too much, the U.S. economy may actually go into a severe recession.”

Cheng believes this uncertainty will drive a lot of volatility in both the stock and crypto markets but will stabilize by next year. At the same time, the months ahead of the next Bitcoin “halving” in 2024 could start “another bull market.”

How to trade crypto using BTC dominance?

February 28, 2022 Coin Telegraph

Altcoins

BTC dominance can directly affect altcoins by displaying the market’s trading volume in BTC vs. altcoins.

Bitcoin (BTC) is both the first and the most prominent cryptocurrency in the world when it comes to market capitalization as well as trading volume. These factors are quite significant, considering that all cryptocurrencies trade against Bitcoin and Bitcoin’s dominance can actually serve as a valuable indicator when trading all different types of cryptocurrencies.

This post will offer insight on how to trade cryptocurrency while utilizing the Bitcoin dominance indicator and how to read the Bitcoin dominance index chart overall.

What is the BTC dominance chart?

Bitcoin dominance is uncovered by comparing Bitcoin’s market capitalization to the capitalization of the entire crypto market. The higher Bitcoin’s market capitalization the more Bitcoin dominance is at play, and we have the answer to the question: What percentage of the crypto market is Bitcoin?

The BTC dominance TradingView chart showcases these numbers in a clear percentage format where one can take a quick glance and understand if BTC dominance is at 40% or 60%, for example.

That said, users can also view the Real Bitcoin Dominance Index, which calculates BTC dominance only against proof-of-work (PoW) coins aiming to become a form of money.

The logic behind the Real Bitcoin Dominance Index is that many altcoins such as stablecoins aren’t aiming to compete with Bitcoin and, so, it may paint a more realistic long-term view on Bitcoin’s dominance.

This indicator even gives users the option to exclude Ethereum, as it’s debatable whether or not Ether (ETH) is meant to be a currency rather than a utility token.

How does BTC dominance affect altcoins?

BTC dominance can directly affect altcoins, as it showcases how much of the market’s trading volume is in BTC vs. how much of the trading volume is in altcoins.

Generally, if Bitcoin dominance is up, then traders recommend one has more of their crypto holdings in BTC than in altcoins. If BTC dominance is down, traders recommend one holds more altcoins than they do Bitcoin.

While it’s wrong to say Bitcoin dominance is an exact representation of a bear or bull market, there are correlations between these definitions. For example, bull markets might lead to lower BTC dominance, as funds are typically pouring into altcoins at that time.

Conversely, bear markets might see higher BTC dominance, as traders may be pulling their funds out of altcoins and putting money into Bitcoin since it’s more of a reliable asset.

Some enthusiasts might say that lower Bitcoin dominance is a good thing, as it means the crypto market is expanding and funds are flowing through all sorts of projects instead of just Bitcoin. But, it’s also worth noting that the total crypto market capitalization will take pre-mined and forked coins into its value, meaning altcoin counts might be artificially inflated.

One should also consider the fact that Bitcoin dominance can decrease even when the asset’s price increases. This can occur when money is pouring into the crypto market with Bitcoin included, though more money might be moving into altcoins than the world’s largest cryptocurrency.

The point is, while Bitcoin dominance might paint the crypto market a certain way on a surface level, there are various factors to consider to gather an informed view.

Sometimes dominance might be down due to a short-term altcoin boom while other times, the entire market might be bleeding money. It’s always best to do additional research before making an investment decision.

How to trade Bitcoin dominance?

There are multiple factors to consider when attempting to trade Bitcoin dominance. First, understand that Bitcoin dominance can go down if interest is high in even one altcoin. This interest in a single altcoin doesn’t mean that every altcoin will experience upward trends. The market may take some time to correct itself.

It’s also best to consider the intent of some popular altcoins and whether or not that intent will translate into a lasting impact on the altcoin market. For example, we might see a stablecoin experience a significant uptick in volume for the time being.

However, users might invest in said stablecoin simply to move those funds over to Bitcoin, as stablecoins can be an easy way to onramp funds into the crypto industry.

As a result of this activity, Bitcoin’s dominance could quickly drop and rebound, impacting short-term trades negatively. Another factor that could lead to unpredictable short-term drops or rises in Bitcoin dominance is fear of missing out (FOMO).

New coins enter the crypto market all of the time. Some of these new altcoins entering the market generate a ton of hype that results in hundreds of thousands of dollars flowing into the altcoin side of things and disproportionately lowering Bitcoin’s dominance.

However, many new altcoin projects often lose their hype or even end up being a scam, causing users to pull out their holdings as fast as they input them. In that case, Bitcoin’s dominance might rise back to its original place.

One should also consider the extremes of Bitcoin’s dominance ratio. For example, Bitcoin’s dominance used to be at over 90% before altcoins entered the market. However, enthusiasts note that Bitcoin’s dominance is unexpected to hit that number again due to the prevalence of altcoins in today’s market. But, it’s impossible to say for sure, as if countries follow El Salvador implement Bitcoin as legal tender BTC’s dominance may rise once again.

In fact, Bitcoin’s dominance is much more likely to hit new lows than new highs as altcoin projects continue to gain popularity across the mainstream.

As a result, traders should note when Bitcoin dominance is trending toward an all-time high, as that could mark a good threshold in which BTC dominance may see resistance. Conversely, users should keep an eye on BTC dominance reaching toward new lows and how the altcoin market is reacting as a result.

What happens when Bitcoin dips?

Bitcoin’s price dip could mean a lowered dominance in that users are moving funds away from BTC into other altcoins, but a price dip can also have little to do with dominance as a whole. If Bitcoin dominance drops, users might certainly expect an altcoin bull run and can trade accordingly.

That said, a Bitcoin price dip could occur if users are pulling funds out of all cryptocurrencies, resulting in a lower crypto market capitalization overall. In this case, Bitcoin dominance may remain at a certain percentage despite traders’ anticipation of a potential bear market.

This example is an essential reminder that Bitcoin dominance shouldn’t be the only tool at a trader’s disposal, rather one of many to examine before making a trade.

The impact of a Bitcoin crash on the crypto market

Dominance aside, a significant Bitcoin price crash has historically often led to an overall market crash, though few exceptions exist. This correlation between Bitcoin and a market crash is simply because Bitcoin is the world’s first cryptocurrency and all crypto assets trade against it.

Look at it this way: If a country considers banning Bitcoin and the price drops significantly as a result, traders and speculators might lose confidence in altcoins as well and pull their funds from these alternative investments.

That said, a Bitcoin crash doesn’t always mean an overall market crash. There are multiple occasions where Bitcoin suffers a significant price drop while Ether remains more stable. It’s important to remember that different assets serve different purposes, and the downtrend of one may not correlate to the downtrend of another.

In fact, as time goes on and altcoins break into the mainstream consciousness, future Bitcoin crashes might have less and less of an effect on the overall market. Bitcoin dominance matters now because it’s still the most popular cryptocurrency in the world. If other coins begin to take that mantra away from Bitcoin, dominance will matter less and less.

Bull