Bitcoin Dominance Surges as Altcoins Extend Sell-Off
After nearly all cryptoassets fell yesterday, leading to bitcoin’s safe-haven status being questioned in the community, a fresh wave of selling again hit the market on Wednesday. This time, it’s the altcoins that are taking the worst hit.
As of press time on Wednesday (10:30 UTC), bitcoin (BTC) is trading at USD 9,159, down just over 4.5% over the past 24 hours. Meanwhile, ethereum (ETH), XRP, and bitcoin cash (BCH) are down by 9%, 9.8%, and 13.4%, respectively.
Bitcoin price chart:
Following the latest sell-off in altcoins, bitcoin dominance, or the percentage of the total market capitalization, is once again increasing, with the coin currently accounting 63.9% of the entire crypto market, or almost 1 percentage point more than yesterday, and 2 percentage points more than a week ago (according to Coinpaprika.com data). Earlier this year, bitcoin dominance hit 68%. As a result of the recent change, the “altseason is back” narrative that some have held up is once again being questioned by the market. Major altcoins fell more than BTC in the past week, however, many of them are still outperform the most popular cryptoasset in the past month.
Despite the recent selling, which has led to a short-term correction, many analysts remain optimistic about bitcoin’s prospects over the mid to long-term. One of them is crypto market researcher Glassnode. Yesterday, they pointed out that an often-overlooked technical indicator known as MVRV Z-Score shows that bitcoin still has plenty of room to grow to the upside over the long-term:
However, some other technical gauges are signaling further downside. The GTI Vera Band Indicator, which tracks upward and downward trends, shows Bitcoin’s recent uptrend could be tested, according to Bloomberg. A breach of the indicator’s lower limit of USD 9,195 could signal a trend change, with a new downtrend forming subsequently.
Meanwhile, some also point to the much-debated bitcoin stock-to-flow model as a reference for what might happen next with the bitcoin price. As pointed out by the Bitcoin evangelist at Kraken, Pierre Rochard, the coronavirus is not a factor in the stock-to-flow model, and should therefore just be considered “noise” for bitcoin investors.