Bitcoin Maintains Range Formation as BTC Dominance Grows

Bitcoin’s price continues to trade in a narrow range formation as of Friday morning, extending a period of relative calm for the digital currency and potentially weakening the case for an imminent bearish reversal.

Steady Trading

Bitcoin is presently trading at $3,651.98, based on aggregate data provided by CoinMarketCap. That represents a gain of 0.6% over the past 24 hours. Over the past week, BTC has declined by a little more than 1%, though it has maintained a steady trading range north of $3,500 during that period. Prices peaked near the $3,750 range on Monday before the rally lost steam later in the week.

The hourly chart view, based on Bitstamp exchange data, shows weak underlying momentum. This raises doubts about the possibility of a strong weekend bounce back toward Monday highs. That being said, bitcoin’s weekly stretch of relative calm alleviates the risk of an imminent correction back down to December lows.

Interestingly enough, bitcoin’s stable trading range has been accompanied by a noticeable rise in trading volume. Since Sunday, virtual exchange trading has exceeded $5 billion. In the most recent 24-hour cycle, roughly $5.3 billion worth of BTC traded hands.

BitMEX continues to be the largest exchange market for bitcoin trades, though its share has dwindled significantly. As Hacked reported on Tuesday, the exchange is permanently closing U.S. accounts amid growing regulatory scrutiny.

Bitcoin Dominance Rises

At nearly $64 billion, bitcoin is easily the world’s largest cryptocurrency by market capitalization. Its share of the overall market has increased slightly since the beginning of the year as altcoins and tokens struggle to emerge from its strong gravitational pull. At the time of writing, bitcoin’s dominance rate was 52.4%.

The following chart highlights bitcoin’s share of the overall crypto market during the last 12 months. As you can see, BTC accounts for a bigger slice during bearish trends.

During bear-market trends, altcoins and tokens tend to mirror bitcoin’s trajectory. Although there are notable exceptions, particularly for coins like XRP and recently, Ethereum, the market is strongly correlated with BTC during periods of instability.

For bitcoin at least, the volatility regime has declined significantly over the past month. On Thursday, bitcoin’s 30-day volatility index fell to 4.17%, the lowest since Nov. 23. The volatility tracker from measures the extent to which the asset’s price varies over time.

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.

Chief Editor to and Contributor to, 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