Bitcoin Price Notches 18-Day High as Momentum Builds
Bitcoin’s tepid rally is looking more convincing on Wednesday, with prices returning above $6,500 for the first time in a week. Despite being outperformed by its altcoin peers, the BTC trade is gaining momentum based on the short-term technical charts.
At the height of the Wednesday rally, bitcoin traded hands at $6,615 on Bitfinex, the highest in two weeks. At the time of writing, BTC/USD was up 0.8% at $6,574. The leading digital currency has returned 3.3% over the past seven days, which is well below some of the leading altcoins.
Bitcoin’s momentum indicators have risen sharply, based on the 4-hour chart, signaling the potential for continued upside ahead. The relative strength index (RSI) is teetering on overbought levels, which means a slight pullback may be observed en route to new multi-week highs.
Bitcoin’s trade volume increased on Wednesday along with the broader market, reaching $5.1 billion, according to CoinMarketCap. That’s the highest daily turnover since Oct. 16 and a 16% increased compared with Tuesday. BitMEX, a popular derivatives platform, processed more than 18% of the daily volume.
Bitcoin Dominance Rate Falls
Bitcoin’s dominance rate, or the share of the overall cryptocurrency market held in BTC, fell on Wednesday to its lowest level in a month. According to CoinMarketCap data, bitcoin now accounts for 51.6% of the overall market, down from a high near 55% last month.
Looking at the three-month chart, bitcoin’s dominance peaked in September when nearly 58% of the total market value was compromised of BTC.
Bitcoin’s dominance rate paints an important picture of overall market conditions. During the depths of the bear market, crypto investors were seen piling into bitcoin as the only proven digital alternative to more conventional assets like stocks and bonds. Bitcoin’s growing share of the market also represented a loss of confidence in alternative coins, especially those that were born during or after the ICO boom.
The decline in bitcoin’s dominance, as was observed during the height of the bull market, signaled broad diversification away from the original cryptocurrency and healthier market conditions as a whole. It also meant that the market was less prone to bitcoin’s overt price dominance.
As Hacked recently reported, several alternative coins have reported double-digit percentage gains over the past seven days, but none more than bitcoin cash and XRP.
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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