Bitcoin analysis suggests that all may not be well for BTC price strength as altcoins make their move.
Bitcoin (BTC) risks “rolling over” to cancel its latest uptrend, new analysis warns as altcoins surge.
In a post on X (formerly Twitter) on Dec. 9, popular analyst and social media commentator Matthew Hyland flipped cautious on BTC price action.
Bitcoin bulls kept momentum hot into the end of the week’s Wall Street trading as BTC/USD sealed new 19-month highs of $44,729 on Bitstamp on Dec. 8.
Three key Bitcoin price indicators explain why BTC price continues to fall toward new lows.
Bitcoin (BTC) surpassed the $30,000 resistance on June 21, or 40 days ago, after a notable 19.5% gain in a week. Since then, it has been moving within a range filled with occasional moderate corrections and BTC price trades near $29,300. While these consolidation periods are common in traditional markets, they tend to make crypto investors quite anxious.
As Bitcoin's price repeatedly fails to break the $31,000 level, traders are becoming increasingly tense and their sentiment is worsening. This trend could reverse suddenly, regardless of any relevant news or macroeconomic factors that might support an upward move andcrypto traders' emotions can magnify positive and negative price swings, leading to euphoric and fear-led price action.
The increased anxiety among traders is partly due to Bitcoin's historical volatility, which used to be much higher than its current levels. Presently, the 33% annualized 50-day volatility is the lowest in 6 months, contrasting sharply with the 60% or higher volatility observed for 245 days throughout 2022. Despite the rationale for this shift, the recent period has been relatively calm for Bitcoin's price.
To put it in perspective, consider that auto and electric battery producer Tesla (TSLA), a top-10 global asset and part of the S&P 500 index, currently experiences a 58% annualized volatility. In comparison, graphics chipmaker NVidia (NVDA) has consistently demonstrated a 70% or higher volatility for most of 2021.
While some analysts use volatility data to predict trends, it's essential to note that this indicator relies on absolute price changes, yielding the same outcome for both upward and downward price swings. Therefore, volatility only provides information about the magnitude of daily oscillations.
However, apart from price changes, there are other metrics that can indicate investors' excitement or lack of interest in an asset, such as evaluating its market share or market dominance.
On July 30, Bitcoin's market share in the total crypto capitalization dropped to 49.5%, the lowest figure since June 16.
This decline can be partially attributed to a favorable legal decision for Ripple Labs on July 13, which reduced regulatory risks for altcoins. Industry representatives believe this decision will benefit crypto exchanges Coinbase and Binance in their SEC lawsuits. The diminishing dominance of Bitcoin marks a trend shift from the gains observed between December 2022 and June 2023 when it increased from 40.2% to 52%.
Bitcoin's 1-year active supply, representing the sum of unique BTC transacted in the trailing 12 months, reached its lowest level since February 2016 at 6.0 million BTC as of July 26. This data, compared to the 6.2 million BTC activity three months prior, raises concerns, especially with the potential approval of spot ETFs in the U.S.
The decreasing number of Bitcoin moved on-chain might have been offset by the increased use of the Lightning Network as an alternative solution. However, this Layer 2 solution currently holds a mere $138 million in Total Value Locked (TVL) and shows a near unmoving 16,382 nodes in the past 30 days.
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The main "fear and greed" metric for Bitcoin options, the 25% delta skew, indicates that bulls are becoming less confident over time. Readings above 7% suggest traders anticipate a drop in Bitcoin's price, while periods of excitement typically yield a -7% skew.
Currently, the 30-day metric remains flat at 1%, indicating a balanced demand between call (buy) options and protective puts, signaling a neutral market. However, it does show a decreased appetite among bulls compared to the 2% to 14% discount on neutral-to-bearish put (sell) options between June 19 and July 29. This derivatives data strongly supports the notion that traders have become less confident since the $29,500 support level broke.
As investors' mood worsens and indicators point to increased tension, Bitcoin price faces mounting pressure in the near term. Falling dominance, lackluster network activity and concerns in the options markets all contribute to the potential negative impact on Bitcoin price. On a positive note, if traders remain cautious and anticipate further downward movement, the likelihood of excessive liquidations among leverage traders is reduced.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Exchange, DeFi and metaverse tokens were hit hard in the second quarter of 2023 while Bitcoin continued to make gains.
The second quarter of the year has been a solid one for Bitcoin’s performance as its market dominance gained against altcoins, which “bled” throughout the quarter, according to CoinGecko.
On July 18, the crypto data aggregator released its industry report for Q2 2023 which noted Bitcoin (BTC) and Ether (ETH) continued to build upon their Q1 gains over Q2.
Meanwhile, Binance Coin (BNB), XRP (XRP) and Cardano (ADA) suffered double-digit losses over that time.
CoinGecko said BNB and ADA saw the largest losses as both were labeled securities in lawsuits against Binance and Coinbase filed by the Securities and Exchange Commission.
Decentralized finance (DeFi) tokens were hit particularly hard during the quarter with Uniswap (UNI), Chainlink (LINK) and Lido (LDO) taking double-digit losses.
The top five metaverse and play-to-earn tokens by market cap including Axie Infinity (AXS), Sandbox (SAND) and Decentraland (MANA) also marked losses of up to 40%.
As a result, Bitcoin dominance increased to a two-year high of just over 52% in late June. However, it dropped back below 50% recently with the altcoin rally driven by Ripple’s partial court victory.
Additionally, most of the altcoins that made gains following the 80% XRP pump have already lost them, returning markets to the status quo before the court’s ruling.
CoinGecko reported the total market cap remained sideways for the quarter, ending where it started the period at $1.2 trillion. It has remained sideways into the third quarter and is still at $1.2 trillion at the time of writing.
The big winner for the period was Bitcoin, which outperformed the rest of the market with its gain of almost 7%, the report noted. However, the average daily trading volume for BTC declined 58.7% from the previous quarter.
Related: ‘Altcoin season’ anyone? Bitcoin dominance tumbles after XRP victory
“After a stellar Q1, Bitcoin still outperforms most major asset classes in Q2, only lagging behind the NASDAQ and S&P500,” the report stated.
With most altcoins aside from XRP continuing to retreat at the moment, hopes for an early "altseason" are dwindling as Bitcoin remains the king of crypto.
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Bitcoin market dominance briefly dipped below 50% as altcoins deemed securities by the SEC notched double-digit gains.
Bitcoin (BTC) dominance has taken a tumble in the wake of Ripple’s partial victory against the United States Securities and Exchange Commission, with a surge in altcoin prices briefly causing BTC dominance to fall under the 50% mark.
Bitcoin dominance — the measure of how much Bitcoin makes up of the total crypto market cap — fell to 49.76% during Asian trading on July 14, according to Tradingview.
Just weeks earlier, BTC market dominance finally managed to rachet above 50% after a dry spell of two years, amid a slew of applications for spot Bitcoin ETFs from major financial firms. Over the last 24 days, Bitcoin dominance had been hovering around 51% and 52%.
The recent dip in Bitcoin dominance comes as the crypto community is chanting the return of “altcoin season.”
Boosted by Ripple’s court victory the XRP token skyrocketed 83% to top out at an intraday high of $0.866, and briefly became the fourth-largest crypto asset by market capitalization. It is currently sitting at 5th place after a tussle with Binance Coin (BNB).
ALTCOIN SEASON
— Carl From The Moon (@TheMoonCarl) July 13, 2023
The move was also noticed by members of the crypto community who were avidly celebrating the Ripple triumph.
Several of the altcoins also alleged to be securities by the SEC surged double digits on July 14.
XRP declared not a security.
— Will Clemente (@WClementeIII) July 13, 2023
Bitcoin dominance: pic.twitter.com/veZDJTHQlu
Ethereum (ETH) gained an impressive 8% to top $2,000 for the first time in three months while Cardano (ADA) pumped a massive 25% to reach $0.357 at the time of writing.
Solana (SOL), another token deemed a security by the SEC, was up 34% to reach $29 at the time of writing. Meanwhile, Polygon (MATIC) had pumped 20% to trade at $0.854.
Stellar Lumens (XLM), a payments network launched in 2015 as a fork of the Ripple codebase, cranked over 50% on the news.
Related: Which altcoins will survive the SEC crackdown? Bitcoin OG explains
However, it remains to be seen if this altcoin rally is sustainable as the longer-term view still shows that crypto markets are range-bound.
At the time of writing, BTC dominance is back to around 50.11% just above its 50-day moving average. The asset only managed a 3.5% daily gain to top out at $31,686 and was outperformed by its altcoin brethren.
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Bitcoin dominance is rising, but so is Ethereum’s share of market dominance among its altcoin competitors. Cointelegraph explains why.
Ethereum has been the dominant smart contract and decentralized application (Dapp) network since its inception. An analysis based on Ether’s price (ETH), and its market capitalization, shows indisputable evidence that the blockchain has been gaining market share over time.
As shown above, Ether’s dominance in market capitalization terms grew over the past couple of years, from an 18% average in July 2021 to the current 20%. Excluding Bitcoin (BTC) from the analysis, Ether’s market share presently stands at 40.6%, while the next competitor, BNB, holds a 7.2% share.
This shows the disparity from the leading Dapp-focused network to the incumbents, which is also evident when analyzing the total value locked (TVL) on each network’s smart contracts. Ethereum is the absolute leader with $24.6 billion in TVL, followed by Tron’s $5.4 billion and BNB Chain’s $3.3 billion.
The above chart depicts the Ethereum network’s TVL market share declining from 70.5% in June 2021 to 49.5% in May 2022. The movement happened while Terra and Avalanche gained a combined 20% market share in smart contract deposits. However, after the Terra-Luna ecosystem collapse in May 2022, which culminated with developers halting network activity, Ethereum quickly regained a 58% market share.
Despite the emergence of Dapps on the BNB and Tron blockchains, Ethereum’s leadership has remained unquestioned over the past 12 months. This data shows the irrelevance of the total number of unique active wallets interacting with smart contracts (UAW) per chain.
For instance, according to DappRadar, WAX has 363,600 active users, followed by BNB Chain's 517,300 30-day UAW. These figures are way higher than the Ethereum network’s 66,300 unique active addresses, but they reflect a much lower transaction fee, opening room for manipulation.
Ethereum is the ecosystem with the highest number of active developers, surpassing 1,870, which is more than the next three competitors combined: Polkadot (752), Cosmos (511), and Solana (383).
Currently, the Ethereum network has over 700,000 validators, with 99% of the balances locked in staking participating in the process. The 32 ETH threshold limit per validator undoubtedly inflates this number, but Lido, the largest known staking pool, controls 32% of the staking, with Coinbase coming in second with 9.6%.
Consequently, it is safe to say that Ethereum is far less centralized in terms of development and validation in comparison to Tron, BNB Chain and Solana.
Other reasons why Ether’s dominance has been on the rise, even as Bitcoin reached a 50% market share on June 19 are: derivatives activity and Ethereum’s dominance of the NFT market
Ether’s future contracts are essential for institutional trading practices like hedging and trading with leverage. Ether’s cash-settled futures were added to the Chicago Mercantile Exchange in February 2021. To date, no other cryptocurrency, apart from Bitcoin, has ever reached the world’s largest derivatives exchange.
In futures markets, longs and shorts are balanced at all times, but having a larger number of active contracts — open interest — allows the participation of institutional investors who require a minimum market size. Ether futures aggregated open interest stands at $5.4 billion, while competitors BNB hold $380 million and Solana a mere $178 million.
Nonfungible tokens (NFT) are a perfect example of how cheaper and faster transactions do not always translate to increased adoption. There’s nothing stopping NFT projects from shifting between blockchains, whether for new listings or existing collections. In fact, y00ts and DeGods moved to Polygon earlier in 2023.
Despite facing gas fees that oftentimes break above $10, Ethereum remains the absolute leader in the number of buyers and total sales. According to CryptoSlam!, the leading network reached $380 million in sales in the past 30 days, while Solana, Polygon and BNB Chain totaled a combined $93 million.
Ultimately, the data favors Ethereum versus the competing smart contract-focused blockchains. The positive trend in Ether’s dominance might fade over time if the promised upgrade to allow parallel processing (sharding) does not come to fruition, but for now, Ether’s 20% market capitalization share remains unchallenged.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
In the last 24 hours, Bitcoin's percentage of the crypto market cap retreated by nearly 1% while Ether gained just over 1.1%.
Ether (ETH) prices have topped the psychological $2,000 level following the Shapella upgrade this week and the result is a decline in Bitcoin (BTC) market dominance.
According to data from the analysis site btctools.io Ether’s market share climbed to 19.8%, an over 1.1% boost in the last 24 hours while Bitcoin's dominance slid by just under 1%. Since the beginning of the year, ETH dominance has increased by 7.6%.
Bitcoin’s market dominance has fallen to 47.7% as Ethereum’s market share increased. The post-Shapella ETH rally has knocked BTC off an almost two-year high in terms of market share.
BTC's market share tapped 48.8% on April 12 following its rally to $30,000, the highest it’s been since July 2021 when it came just shy of 50%. Additionally, BTC has not been over 50% dominant since April 2021.
Bitcoin's dominance remains up 13.6% since the beginning of the year, according to TradingView data.
The market share rise in both BTC and ETH has been at the expense of altcoins, most of which have been lackluster during the recent rally of the two top coins.
Bitcoin and Ether combined represent around 68% of the total crypto market. Roughly 10% is stablecoins meaning the other 10,800 or so tokens, as listed on the price analytics platform CoinGecko, have a combined share of just 22%.
Market dominance is calculated by looking at an asset’s market capitalization compared with the total crypto market cap which is currently at an eleven-month high of $1.33 trillion.
Related: Bitcoin dominance nears 50% as research hails ‘bullish’ narrative flip
ETH prices have surged 10.25% over the past 24 hours. As a result, the asset tapped an eleven-month high of $2,122 during the April 14 morning Asian trading session according to Cointelegraph data.
Ether momentum has been driven by a successful Shapella upgrade on April 12 which released staked ETH on the Beacon Chain.
BTC has managed a 2% gain on the day reaching an intraday high of $30,862 during the April 14 morning Asian trading session.
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On Wednesday, April 12, 2023, at 6:30 p.m. Eastern Time, Ethereum’s Shapella upgrade was successfully implemented, enabling validators to withdraw staked ether. Data reveals that more than 860,000 ether is poised for unlocking, and 77,000 ether is expected to be withdrawn on Thursday. Ether’s price has experienced a surge, rising 6% against the U.S. dollar […]
According to worldwide data from Google Trends, the search term “bitcoin” has reached a score of 93 out of 100 in the last seven days. Additionally, the price of bitcoin rose above the $30,000 range for the first time in ten months, or since June 2022. Bitcoin Search Interest Rises as Leading Crypto Asset Taps […]
The total value locked (TVL) in decentralized finance (defi) has risen above the $50 billion mark after falling below the range throughout most of March. At present, the value locked in defi is approximately $50.34 billion, up 1.97% over the past 24 hours.
Defi Value Swells Close to 2% Higher to Over $50 Billion
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