Bitcoin Price Holds Steady as Market Dominance Hits 3 1/2 Month High

The bitcoin price was undeterred by a wider slump in crypto assets Friday, with its share of the total market reaching the highest level since early April.

Bitcoin Price Update

On a 24-hour basis, bitcoin’s price is little changed Friday, with values continuing to hover north of $7,400. Coin values briefly surpassed $7,500 before reverting all the way back to the low $7,400 region.

The largest digital currency by market capitalization booked most of its gains in the span of 24 hours on Tuesday and Wednesday. The uptrend followed a week-long consolidation where markets successfully defended the $6,000 price floor. A confluence of support later emerged near $6,400, propelling a short-term rally toward $7,000 and, eventually, a high near $7,600.

Bitcoin is on track for weekly gains of nearly 19%. Trade volumes have surged 40% week-over-week, including a peak of $6.8 billion.

Bitcoin Dominance Index

Bitcoin’s strength relative to other cryptocurrencies is exemplified by its growing share of the overall market. As of Friday, bitcoin accounted for 45.4% of the total market capitalization for cryptocurrencies, its highest since early Aprilm according to CoinMarketCap. The so-called bitcoin dominance index is up nearly 3 percentage points since Tuesday, when BTC/USD first broke out.

At nearly $128 billion, bitcoin’s market share is nearly three times that of Ethereum, the second largest cryptocurrency by value. Ethereum narrowed the gap to less than half last year, right around the time the bull market began to take off.

As last year’s bull market demonstrated, bitcoin’s dominance index usually declines during a major market uptrend as more capital flows into altcoins. However, the recent rally had the distinction of being largely concentrated in bitcoin. While this may bode well for long-term holders of the digital currency, it can also be viewed as a bearish sign for the overall market. That’s because altcoin price independence is considered an important feature of a healthy cryptocurrency market.

Measured by market cap, cryptocurrencies not named bitcoin (BTC) have gained 10.5% over the past seven days. By comparison, bitcoin’s total capitalization has increased nearly 19%.

Despite bitcoin’s outsized gains, the market is enjoying wider institutional support and important regulatory breakthroughs that could bring greater stability to the asset class. Business Insider and CCN have reported that Coinbase, one of the world’s major crypto exchanges, has scored a major institutional client. Although names have not been disclosed, the client is said to be a $20 billion hedge fund.

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

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