Bitcoin’s Market Cap Crosses $200 Billion in Overnight Rally; New Highs in Sight
Bitcoin’s price crossed $11,400 on Tuesday, reaching the highest level of the year and signaling that the bull market is just getting started. The largest cryptocurrency crossed the five-digit mark last Thursday and hasn’t looked back since.
The bitcoin price peaked at $11,470 on Bitstamp, the highest in 15 months. As of 9:00 a.m. ET, the BTC/USD exchange rate was valued at $11,200, having gained 1.5%. The largest cryptocurrency was holding above $11,200 on most major exchanges.
Bitcoin’s parabolic streak has all the classic symptoms of an overbought rally, according to the relative strength index (RSI). The classic momentum indicator clearly shows that bitcoin is extremely overbought, which means a pullback is expected.
While bitcoin has experienced several pullbacks over the past three months, none have led to a sustained drop in price. In fact, all of the reversals have been bought by the bulls. The two biggest pullbacks were caused by market whales offloading a large percentage of their holdings. Those too were quickly snatched up by the market.
During the height of the rally on Tuesday, bitcoin’s market capitalization swelled to $203.5 billion, according to CoinMarketCap. The cryptocurrency’s reported trade volumes were closer to $22 billion.
Since crossing $10,000, bitcoin is likely headed for higher highs in the short term. Several analysts believe that a fast break to $15,000 is likely now that FOMO, or fear of missing out, has gripped the market.
Bitcoin Dominance Grows
Bitcoin’s dominance rate, which refers to the percentage of total crypto holdings held in BTC, crossed 60% on Tuesday for the first time since early May. A higher dominance rate suggests more capital is flowing into bitcoin as opposed to its altcoin peers. With few exception, altcoins and tokens have failed to keep pace with bitcoin in recent months. And while most altcoins have reported significant gains relative to the U.S. dollar, their performance has been abysmal relative to bitcoin.
Will bitcoin’s rally extend to altcoins and tokens? Read Not a Bubble After All: Crypto Market Tops $330 Billion as Altcoins Follow Bitcoin to New Yearly Highs.
Over the past seven days, bitcoin’s price has appreciated by nearly a quarter. Ethereum (ETH), bitcoin cash (BCH) and Tron (TRX) are all up double digits over the same period but have failed to keep pace with the leader.
Bitcoin’s massive breakout has been accompanied by an unmistakable surge in Tether (USDT) circulation. The controversial stablecoin has seen its market cap spike by 80% over the past three months. As Hacked reported last week, bitcoin’s price usually follows Tether’s market cap, although the relationship is somewhat delayed.
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.