It is known to everyone that value of Bitcoin is the ruling crypto in this market. It shares almost 50 % of the cap of the worldwide market. This asset surged over 6% in the last 24 hours. It regained its lost position by more than $31000. Yet the prices of Bitcoin got cemented almost to $30000 for nearly a month at present. So will the present spike get held or it will only be a short period bounce? The price of Bitcoin holding $31000 and the dominance of more than 46% are very vital for the different altcoins to keep shining. Altcoins possess their independent rallies. Yet they follow this primitive token. It is very evident with Ether. This is because of great short liquidations. The asset stayed restricted under $1900. Thus a current couple of pullbacks along with crashes did not impact the dominance at the highs. Hence it indicated a solid rally is in place till now.
Why the dominance of high Bitcoin is crucial?
- Bitcoin is seen to be on an illustrative run in the past few days.
- It is because its price crossed more than $13000 in 2019 June for the first time.
- This crypto just retreated again to $13200 after it’s marked a new 1-year $13850 high.
- The recent volatility of Bitcoin up-surged.
- It set record volumes across main exchanges as traders jumped in for catching each bit of action.
- Altcoins were relatively muted despite modest profits coat-tailing on the momentum of Bitcoin.
- To place it in perspective, Bitcoin also earned over 30% from its sharp correction at the start of September.
- Large-cap altcoins like Ripple, Ether, Chainlink, and EOS underperformed.
- They have to break the new highs yet.
- Particularly DeFi related coins showed the worst performance and started to fall in their value despite the bullish momentum of Bitcoin.
- Such a peculiar market movement left various investors to scratch their heads because Bitcoin along with altcoin’s correlation weakens.
- A lot of investors expect the upsurge of Bitcoin to affect altcoins positively too.
- Yet this did not happen.
- It was seen over and over again.
- Cryptos always react in many different ways to the price movement of Bitcoin.
- The dominance of Bitcoin marked a new high three months after it hit a low of 55%.
- Such an indicator represents the market cap of Bitcoin as the whole crypto industry’s percentage.
- Any high ratio will indicate that a lot of capital will flow into the crypto, Bitcoin, and vice-versa.
- The last year showed a huge bull rally not one time but twice.
- Only before a huge rally of altcoin, the dominance peaked with the price of Bitcoin also reaching anew ATH every time.
- The high dominance of Bitcoin mainly indicates that altcoins are heavily undervalued.
- Hence it is the time when all funds start flowing from Bitcoin into them.
- Yet the present scenario is a bit distinct from the last year’s rally.
- This is because the liquidity dried up in this market with decreased activity.
- In the past, while Bitcoin ranged high, altcoins became weak.
- But now despite the price of Bitcoin showing few upswing signs along with most altcoins, the Bitcoin and altcoins rallies are very weak.
- So any bounce appears to be only short lasting.
- It is primed to fall hugely.
- Some external factors such as FED rate of interest, regulation of stablecoin, mining ban in a few regions, and so on deeply affected the price of Bitcoin along with its dominance.
- So altcoins may be finding it a challenging job for maintaining the strength for igniting a major upswing.
The relationship of lead lag among Bitcoin and Altcoins is mainly driven by FOMO and greed. The capital moves away from altcoin. Thus it will present an opportunity of buying for all informed traders to own altcoins. It happens when prices become relatively low. Presently, Bitcoin is more than $13000. Ether, Litecoin, and Bitcoin Cash are slowly moving up too. But various mid-cap altcoins did not see similar profits. Coins lagging may be offering buying chances. In such a scenario, you will be able to compare Bitcoin’s relative value against non-performing altcoin. Then you can analyze the risk and reward of the trade. Ultimately if you can identify what market cycle part everyone is in, you will be capable of locking in relatively consistent returns. Trade Cryptos stable coins and other coins on the most trusted platform Bitcoin smart