Bitcoin
and other cryptocurrencies were rising Tuesday with the dominance of the largest digital asset at historically high levels—something that may not bode well for sentiment across the crypto landscape.
The price of Bitcoin has risen more than 1% over the past 24 hours to $26,750, at the upper end of a trading range between $26,000 and $27,000 that has held since a 10-month high above $30,000 was reached in April—a level that has proved difficult to reclaim. Cryptos have continued to stagnate in range-bound trading despite key catalysts on both the regulatory and economic front.
“Short-term indicators point higher, although intermediate-term indicators point lower, so we stay short-term neutral for now,” said Katie Stockton, managing partner at technical research firm Fairlead Strategies. “A breakout, while unlikely near-term, would target second resistance … near $32,000.”
Bitcoin, just like the
Dow Jones Industrial Average
and
S&P 500,
likely will react to congressional testimony on Wednesday and Thursday from Federal Reserve Chairman Jerome Powell. After the Fed held interest rates steady last week—the first time in this tightening cycle that has wreaked havoc on risk-sensitive assets like cryptos—investors will focus on Powell’s tone and whether he telegraphs that more rate hikes are ahead.
But there are also important trends within crypto itself. The dominance of Bitcoin relative to the rest of crypto—a measure of Bitcoin’s market capitalization as a percentage of the total digital asset market cap—recently marched to the highest level in more than two years.
Bitcoin’s dominance stood at 48.5% on Tuesday, according to CoinMarketCap, with some market observers noting a brief spike above 50%. Either way, it represents the highest levels since May 2021 and accompanies declines across the “altcoin” or smaller token space amid regulatory pressures in the U.S. While it is a sign of traders’ confidence in Bitcoin, viewed as a haven asset within crypto, it represents weakening sentiment across the market at large.
“The Bitcoin dominance grows when investors do not feel confident about the short-term market trend and adjust their position towards a less speculative portfolio, increasing their exposure to Bitcoin, which is commonly known to be the less volatile digital asset,” said Matteo Greco, an analyst at digital asset group Fineqia International.
Beyond Bitcoin,
Ether
—the second-largest crypto—gained 1% to $1,725. Altcoins were more mixed, with
Cardano
down less than 1% and
Polygon
up 1%. Memecoins were more muted, with
Dogecoin
and
Shiba Inu
both shedding 1%.
Write to Jack Denton at [email protected]
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