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.

BTC/USD Update

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 (BTC/USD) is consolidating around $10,600 after weeklong advance. | Source: TradingView.

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.

Bitcoin’s share of the overall cryptocurrency market continues to grow. | Source: CoinMarketCap.

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.

Author:
Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi