The cryptocurrency market has suddenly returned to Bitcoin (BTC) after months of insanely decentralized financing (DeFi). While market value dominance remains below 60%, BTC trading dominance rose earlier this month to levels not seen since 2017, when the price reached a full-time high of $ 20,000.
Given Bitcoin’s growing dominance in terms of market size, altcoin (altcoin) is the market in recession. For example, the commercial dominance of the alternative currency leader, Ether (ETH), did not experience a similar boom in the same period.
Why does the altcoin market not work when bitcoin rises?
As we saw from July to early September, when Bitcoin gradually appreciates, this could lead to an ‘alternative season’. In fact, it has passed ETH BTC in percentage this year, and that is partly why Bitcoin’s momentum is back.
Bitcoin and Ethereum indicators since the beginning of the year
Especially in August, the number of DeFi tokens increased from 5 to 20 times, which caused a cryptocurrency mania.
However, when the bitcoin price rises rapidly in a short period of time, it can lead to a sharp decline in the altcoin market. Profits from altcoins are likely to shift to stablecoins and bitcoin, leading to an increase in BTC.
Su Zhu, CEO of Three Arrows Capital, stressed that the fast rally to Bitcoin could be bearish for altcoin. This is to explain:
“The rapid rise in BTC is not only optimistic about the changes, but it is also bearish. There are countless reasons for that, but it boils down to the fact that money is a coordination game and Bitcoin is a shilling point; it does it does not matter how you feel, it literally means nothing to society. ”
A similar trend has been observed on the major cryptocurrency exchanges. Bitcoin’s market share is increasing in Huobi, as Skew’s data shows.
Huobi’s trading data is important because the stock exchange has 1.1% of the bitcoin supply in the cold wallet. It is one of the largest exchanges in the world when it comes to cryptocurrency reserves, together with OKEx and Binance.
What does this mean for BTC?
Over the past 13 days, Bitcoin has appreciated more than 12% against the US dollar. High readings of Bitcoin are achieved after a number of negative events that may have caused a large decline.
As Cointelegraph thoroughly reported, several news related to the exchange, including the suspension of withdrawals of OKEx, caused BTC to fall below $ 11,300. Despite market security and the fall in US equities, BTC crossed $ 11,700.
Analysts are relatively confident in Bitcoin’s optimistic midway. However, if bitcoin falls in the short term as the market seeks help, it could lead to a larger correction in digital currencies.
Michael Van de Pope, a resident trader on the Amsterdam Stock Exchange, believes Bitcoin is likely to fall to $ 11100. Referring to the chart expecting BTC to fall to $ 11.1K. he wrote:
“Still beyond this view, there is a major obstacle to BTC dollars.”