Bitcoin’s Recent Surge and Its Implications for Altcoins 📈
Bitcoin’s value has reached $67,000, highlighting its dominance in an altcoin market that is currently struggling. This year’s price actions reveal Bitcoin’s determination to escape the macro-range it has been trapped in for the past seven months, potentially signaling the onset of a new bullish phase.
In this piece, you will discover how various indicators point to an impending increase for Bitcoin and how the altcoin market may react in tandem.
Bitcoin Hits $67,000 Amidst Growing Altcoin Market Expectations 🚀
As the altcoins fluctuate in performance, Bitcoin solidifies its status as the market leader, enhancing its dominance.
After hitting an all-time high of $73,700 in March, Bitcoin’s value has since remained stable, showing resilience in its performance. Throughout the recent months, its price has not dipped below the $50,000 mark except for brief spikes, suggesting a positive outlook.
Currently, Bitcoin trades at $67,000, representing a 25% increase from the local low observed on August 5th.
The previous all-time high of $69,000 from 2021 acts as a resistance point, with numerous sell orders positioned around this level. Analysts are closely monitoring Bitcoin’s efforts to breach this influential price threshold in the upcoming days.
Pay close attention to the $70,500 price range. Data from Coinglass shows that this area contains $5.5 billion in liquidation risks, should a breakout occur.
The analysis surrounding Bitcoin’s potential short-term price surge is backed by notable statistics regarding its reserves on cryptocurrency exchanges. Despite the rising dominance, the amount of Bitcoin held on exchanges has significantly reduced.
This decreasing supply on exchanges bodes well for price movements, suggesting potential scarcity that could lead to a bullish trend.
Specifically, according to CryptoQuant’s figures, Bitcoin reserves on centralized exchanges (CEX) have plunged to a new low of 2.69 million BTC.
A short squeeze could very well propel Bitcoin to new heights before the end of this year.
Bitcoin’s Dominance Surges to 58.75%: A Three-Year High 📊
As Bitcoin’s price escalates, its dominance has soared to levels not seen in the past three years.
The market capitalization of Bitcoin now represents 58.75% of the total cryptocurrency market. Specifically, Bitcoin’s value has reached $1.3 trillion amid a market total of $2.3 trillion, positioning it as the 10th largest asset globally, just behind major companies like Meta Platforms and Saudi Aramco.
Within the competitive crypto landscape, Bitcoin’s prominence has been steadily on the rise since November 2022.
In recent weeks, a notable acceleration has brought its dominance to 58.75%, inching closer to the crucial 60% psychological benchmark.
This marks the highest dominance level since April 2021, during which Bitcoin began to lose ground in market share amid a preceding bull market.
Only time will tell if Bitcoin can reclaim the 60% dominance as many analysts eye a potential downturn in this metric.
The Effect of Bitcoin’s Dominance on Altcoin Prices 🔄
A bullish dominance scenario for Bitcoin does not usually translate into favorable conditions for altcoin price growth.
Historically, altcoins tend to experience upward momentum when Bitcoin steps back from the forefront. Initially, Bitcoin’s gain leads to an increase in its dominance before allowing altcoins to bask in the limelight.
This current phase is precisely what is termed as “Bitcoin Season,” where significant gains primarily manifest in the leading cryptocurrency.
The performance metrics indicate that numerous crypto assets have underachieved compared to Bitcoin since the beginning of this year.
The Altcoin Season Index presently sits at a mere 20, signaling a bearish trend akin to the conditions observed late in 2023, just prior to the anticipated 2024 bullish phase.
Amid Bitcoin’s current prowess, some analysts speculate on an impending decline in its dominance, potentially paving the way for other speculative assets in the market.
A recent discussion by ICT Crypt’s founder Benjamin Cowen predicted that dominance may rise to approximately 60% before witnessing a significant drop.
His thoughts encapsulated the prevailing sentiment:
“Quite soon, there will be a breakout […] This will lead to memecoins and other major altcoins having a taste”
Indicators such as the EMA50 on the weekly dominance chart are crucial. A breach of the 54.78% level could trigger a reaction in altcoin prices. For now, the onset of Altseason remains on hold.
Market Cycles: The Current Position of Bitcoin and Altcoins ⏳
With Bitcoin’s price movements and the ongoing dynamics between dominance and altcoins, many are pondering our current position within the market cycle.
This question arises from the fact that Bitcoin has set new records prior to the halving, deviating from historical four-year trends. In past bull markets of 2013, 2017, and 2020, Bitcoin typically achieved record highs only after the halving events.
However, in 2024, Bitcoin surpassed the $69,000 milestone weeks before the typical window, largely attributed to heightened interest from ETFs.
Despite this leap, Bitcoin’s trajectory in the following months appears to be mirroring past cycles, igniting hopes for further bullish developments.
According to NYDIG’s recent report, Bitcoin is currently less than 700 days removed from its 2021 peak, aligning closely with patterns witnessed during the bull markets of 2017 and 2021.
Following this framework, one might anticipate an imminent surge in Bitcoin’s price, advancing to new highs before entering a phase of price discovery.
In this hypothetical scenario, dominance may still have opportunities for growth; however, the latter part of the cycle could provide space for altcoins to flourish.
As it stands, Bitcoin Season seems set to persist until year’s end, with a gradual return of altcoin profitability anticipated as we move into 2025.
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