Bitcoin Dominance Rate Hits 2018 High
After a series of volatile price swings, bitcoin’s price was back on even keel Tuesday. The leading digital currency hovered within a narrow range in overnight trade, mirroring a trend that re-emerged in mid-August following a volatile selloff.
The bitcoin price rose slightly to $6,323 on Bitfinex after reaching a session high of $6,399.60. The cryptocurrency’s daily price fluctuation narrowed to just $105, which is much lower than in recent sessions. At current values, BTC is capitalized at $109.7 billion, down sharply from the recent peak of around $127 billion.
Despite recovering from monthly lows, bitcoin has retained its short-term bearish bias according to the technical studies. Underlying momentum, as conveyed through the relative strength index (RSI) is weak, while the moving averages are approaching a bearish crossover.
The bitcoin price is down more than 13% over the past week.
The broader cryptocurrency market was valued at $195.5 billion on Tuesday after hitting a low of $191 billion over the weekend. Overall trade volumes have fallen back below $11 billion, according to latest available data.
Bitcoin Dominance Rate Rises
Bitcoin’s sharp decline over the past week has paled in comparison to some of the leading altcoins and tokens, which have lost in excess of 20-30%. Ethereum, for example, is down more than 32% over the past week and is charting new lows for the year. As a result, bitcoin’s share of the overall cryptocurrency market continues to grow.
The bitcoin dominance rate, a gauge provided by CoinMarketCap that tracks the percentage of the total cryptocurency market capitalization held in BTC, reached 56.3% on Tuesday. That’s the highest level since December. Perhaps more astonishing is the fact that bitcoin’s dominance rate has increased 25 percentage points since February and roughly 20 percentage points since early May.
Over the same period, the share of the total market held in Ethereum, Litecoin, bitcoin cash and XRP has decreased. Currently, roughly 18% of the market cap is held in cryptocurrencies outside the top-ten.
Traders monitoring the fundamental news have likely observed several positive developments concerning regulation, institutional adoption and stablecoins. This has led to optimism that the market is primed for a turnaround in the short term. Although the technical indicators currently do not support that notion, digital currency prices can change on the turn of a speculative dime.
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.
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