Bitcoin (BTC) sees a remarkable light in a bearish tunnel at the start of the new week: its dominance has risen around 17% amid a sell-off, while it is also among the coins that have fallen the least in the past 7 days and beyond their all time highs (ATHs).
At 7:25 UTC, BTC is trading at 36,461 after rising nearly 1% in one day. However, it’s down 21% in a week and down 28% in the last month.
Bitcoin is known to be the first coin per market capitalization with currently USD 682.3 billion. And amid the sell-off, its share of total market cap, known as dominance, has increased around 17% in 7 days as many other crypto assets have decreased versus BTC.
More precisely, it rose from 39.1% recorded from Coinmarketcap.com on May 18 to 45.6% at the time of writing – that is, it’s up 6.5 percentage points. The highest value during this period was yesterday at 48.36%.
Related to this, since January through March of this year (and much higher before March 2017), BTC has been seeing percentages in the 60s and low 70s that were 70% at the start of 2021.
As with other coins in the top 10 by market capitalization, the dominance of Ethereum (ETH) is the second highest at 17.5% compared to 19% on May 18. Others on the list each have less than 4% today, while the coins outside the top 10 combined have 19% dominance.
In addition, Bitcoin is among the coins that have fallen off the least from their recently won ATHs. It fell 43% in 40 days from USD 65,028 (per coin paprika) on April 14th.
The only top coin that has fallen less is Cardano (ADA), up nearly 40% in eight days since the ATH of $ 1.48. ETH is following BTC with a 48% decline from USD 4,365 in just under two weeks, confirming previous warnings that ETH has “significantly higher downside risk”.
Other coins in the top 10 fell between 55% (Dogecoin (DOGE)) and 78% (XRP), although XRP is the only coin on the list that hasn’t hit an all-time high since 2018. Otherwise, it’s forty days.Bitcoin is the longest time frame on the list, while others hit their ATHs eight to sixteen days ago.
Loan Venkatapen, co-founder of Blocklabs Capital Management, told Bloomberg states that BTC is “not dying”, but nevertheless “expect that productive blockchain assets like Ethereum or Solana will question Bitcoin dominance in the coming months”.
According to Bloomberg, crypto hedge funds bought this latest drop, including London-based investment manager MVPQ Capital. Its founder and CEO, Felix Dian, was quoted as saying that “we kept dry powder” and that they bought BTC for USD 35,000.
Charlie ErithByteTree Asset Management’s CEO was quoted as saying that at $ 35,000, “we felt it was a reasonable level to add” and that they don’t think “this will be a 2018 visit again.” “. When prices collapsed, even more of a crypto winter began.
While investors spent around $ 410 billion on BTC during this bull market, according to Chainalysis data from blockchain analysts, those positions were lost $ 300 billion when BTC fell to $ 36,000.
“People who borrowed money to invest have been removed from the system,” Kyle Davies, co-founder of Three Arrows Capital, told Bloomberg, adding that “every time we see a massive liquidation, there is an opportunity to buy consists. […] I wouldn’t be surprised if Bitcoin and Ethereum retraced the entire drop in a week. “
Also crypto financial service provider Amber Group written down Today they experience a relaxation in smaller altcoins with rotation back in BTC and ETH.
“Crypto funds, macro funds, opportunistic [venture capitalists] Beginning of buying this break in BTC + ETH as well as blue-chip DeFi by staggering the limit orders, “they added,” the purchase is currently still relatively passive / measured. “
Last week, the question “Should I buy Bitcoin?” According to Google Trends, it was googled an average of three times more than the question “Should I sell Bitcoin?” It was consistently more popular than its selling counterpart.
according to to Jeff Dorman, Chief Investment Officer (CIO) of investment management firm Arca, there are “1.5 / 3 factors that are still very optimistic about risk-weighted assets. Due to the probability weighting, there should still be purchasing power on the sidelines. The only question is when and how it will be deployed. “
These factors are:
- Interest rates and the dollar still haven’t reacted which is still very bullish for risk-weighted assets.
- institutional money was already slowing;
- The environmental, social and governance (ESG) narrative is unlikely to ever go away. Science is unlikely to change people’s minds and “this will become more political theater than substance”.
In addition to decentralized funding (DeFi), BTC is also benefiting disproportionately from a coordinated attack by government / regulators on miners and exchanges, added Dorman.
Meanwhile, the three behaviors that often get investors (especially hedge funds) in “trouble” are leverage, illiquid positions, and short selling.
For everyone else: stay liquid, choose your spots, trust your analysis and keep your emotions in check.
Digital assets are no longer disappearing to cure cancer than they were two weeks ago.
The answer is usually in the middle. Wealth is made when emotions are too high pic.twitter.com/ZGuHu59NsQ
– Jeff Dorman, CFA (@ jdorman81) May 23, 2021