66.6%: Bitcoin Dominance Spikes as Oversold Recovery Begins
Bitcoin’s price was in the early stages of recovery Tuesday, as markets rebounded from oversold levels following a peak-to-trough reversal of more than 25%.
The bitcoin price returned above $11,000 on Tuesday, hitting a session high of $11,042.11 on Bitstamp. At the time of writing, the largest cryptocurrency was trading just below $10,500, having declined 3.2%.
Over the 24-hour trading cycle, the BTC/USD exchange rate is up 4%, according to CoinMarketCap.
At current values, bitcoin has a total market capitalization of $190.5 billion, where it accounts for 66.6% of the overall cryptocurrency market. The so-called dominance rate hasn’t been this high in over 27 months.
Most of the top cryptocurrencies were trading higher in the early stages of Tuesday. The total cryptocurrency market was worth $286.7 billion after crashing to the low $270 billion range earlier this week.
Steve Mnuchin Comments on Crypto
Bitcoin’s road to recovery began in the latter stages of Monday’s session after U.S. Treasury Secretary Steven Mnuchin expressed “concerns” about the leading digital currency in a surprise press conference on the subject.
“As the president has said, bitcoin is highly volatile and based on thin air,” Mnuchin said, echoing earlier comments from Trump about the need to better regulate digital assets.
Mnuchin seemed to lump in bitcoin with Facebook’s forthcoming Libra cryptocurrency, a payment system designed to serve the world’s largest social media network. Referring specifically to Libra, Mnuchin said the new cryptocurrency “could be misused by money launderers and terrorist financiers.” He called it “a national security issue” that needs to be reviewed carefully.
Barry Silbert of Digital Currency Group said Mnuchin’s comments were a “complete and total validation of bitcoin.” Travis Kling of Ikigai Asset Management added that the recent commentary on bitcoin from Mnuchin, Trump and Federal Reserve Chairman Jerome Powell is “wildly bullish” for the digital asset class.
The Chairman of the Fed and the Treasury Security both agree that Bitcoin is a speculative store of value.
Both of them, along with the President, agree that Libra and Bitcoin are two very different things.
— Travis Kling (@Travis_Kling) July 15, 2019
In any event, it looks like the United States government would like to develop more regulatory oversight of digital assets and has no intent on blocking their progress. As colleague Joseph Young recently pointed out, Mnuchin said that cryptocurrencies will be subject “to the same level of regulation, oversight, and expectations as traditional financial institutions…”
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock. Chart via TradingView.