As Ethereum World News reported on Friday, Bitcoin saw a rapid sell-off from $6,450 to the $6,100 price level, as a direct result of an influx of sell-side volume cascading through the whole cryptocurrency market.
This move unfortunately set a new one-month low for the price of Bitcoin and a new year-to-date low for the collective valuation of the cryptocurrency market.
As Bitcoin hovered around $6,100, some technical analysts began to speculate that Bitcoin’s next stop would be at the heavily contested $5,800 level of support. But as seen by Saturday’s strong recovery, with the price of the foremost digital asset surging back to $6,400, this move lower to establish new levels of support has been staved off, or at least for now anyway.
However, this time around, altcoins didn’t follow Bitcoin’s ~4% recovery. As it stands, a majority of altcoins have still suffered, posting losses of anywhere from -4% to -10% (and beyond).
Over the past 24 hours, Ethereum has unarguably had a dismal performance, falling over 12% to a low of $307 before slightly rebounding to trade at $325 now. IOTA and XRP follow closely behind in terms of percentage losses, posting 9% and 8% losses respectively.
This widespread capitulation in altcoins has led Bitcoin’s market dominance to see an abnormal surge upwards. At the time of writing, Bitcoin dominance sits at a hefty 51%, which is the highest this figure has been since December 2017. While the relative strength of digital gold surprised more than a few traders, to an assortment of knowledgeable traders, this comparable astronomical rise was an expected event.
One of these knowledgeable traders would be Tom Lee, who recently sat down with CNBC Fast Money to explain his opinion on Bitcoin’s dominance, and what has been catalyzing its movements as of late. Speaking with panelists, one of Wall Steet’s foremost Bitcoin bulls stated:
“Bitcoin’s dominance has been creeping up… So it tells us that the news we have seen, from the SEC saying that Bitcoin is a commodity, to ICE’s announcement and a potential for a (Bitcoin) ETF, are causing investors to decide that Bitcoin is the best house in a tough neighborhood. So I think that Bitcoin dominance is actually showing that the market is reacting to what is good news.”
Image Courtesy of CNBC and Jeff deGraaf
It is important to note that although this move downwards was by not bullish, to say the least, Bitcoin didn’t break the ever so important resistance line pointed out by well-respected technical analyst Jeff DeGraaf. If Bitcoin moves under the line at ~5800, DeGraaf expects the technical state of the asset to go in a so-called “game-over” phase, which isn’t the best sign for such an early-stage investment.
But as aforementioned, the fact that Bitcoin didn’t break that level shows that some hope remains for the fate of this asset. So as Bitcoin begins to pose a stronger shot at a recovery, maybe Dan Morehead’s prediction of a market overreaction to the most recent SEC verdict regarding a crypto-backed ETF might be right after all.
Photo by Austin Neill on Unsplash