Bitcoin Dominance Hits 71%, Highest in Two-and-a-Half Years
Bitcoin extended its recovery on Thursday, crawling back above $10,600 for the first time in over two weeks while altcoins lagged behind. In the process, bitcoin’s dominance rate hit 71% for the first time since March 2017.
The bitcoin price traded within a narrow band on Thursday in a session marked by lower than normal trading volume. BTC/USD peaked at $10,664.13 on Bitstamp. It was last seen hovering right around $10,580, where it was little changed.
Bitcoin has found renewed support at the 30-day exponential moving average (EMA). Below that level, the 100-day EMA is likely to serve as a strong backstop against any potential fall.
The relative strength index (RSI), a closely-watched momentum oscillator, is back in the mid-50s after crashing below 40 late last month.
Bitcoin’s trading range narrowed significantly during the session, which is partially a symptom of lower trading volumes. The ten largest verified spot exchanges processed just over $1.1 billion worth of BTC trades on Thursday, according to Bitwise.
As trade volumes fell, so did volatility. Bitcoin’s 30-day volatility index is currently 3.33%, according to bitvol.info.
Bitcoin Dominance Grows
Bitcoin’s share of the overall cryptocurrency market rose to 30-month highs on Thursday, as demand for altcoins and tokens continued to erode.
At $189.9 billion, bitcoin’s market cap now accounts for 71% of the entire crypto universe. This so-called dominance rate was just over 50% back in March.
A higher dominance rate for bitcoin means altcoins and tokens are less likely to exhibit price independence, which is an essential feature of a maturing market.
The sharp drop in altcoin demand is perhaps best reflected in the Ethereum-bitcoin exchange rate. Ethereum, the second-largest cryptocurrency by market cap, has been in free-fall against bitcoin for most of 2019. ETH/BTC was down another 3.7% on Thursday to 0.01629, a new two-and-a-half year low.
Most of the top 20 cryptocurrencies traded mixed-to-lower on Thursday. The combined value of all assets in circulation, including bitcoin, was $267.2 billion, according to CoinMarketCap.
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.