Photo: Tim Reckmann / Flickr
Data from CoinMarketCap show that Bitcoin dominance fell below the 51% mark early Friday morning. It was gradually declining over the course of the weekend, hitting a low of 50.4% on Saturday afternoon. At the time of writing, the world’s largest cryptocurrency accounts for 50.9 percent of the total capitalization of the entire market and fell as low as 50.54 on March 17, according to data from CoinMarketCap.
Before 2017, Bitcoin’s dominance rate was pretty much in excess of 70 percent, but it began to deflate as new cryptocurrencies were created and sold to investors in initial coin offerings (ICOs), causing BTC’s dominance rate to drop to a low of 32.48 percent on Jan. 13, 2018.
Be it as it may, this is the first time in three months that dominance has fallen below the 51% mark. It is also the first time since August last year, that such a dip lasted for multiple days, and not just hours.
All digital assets carry their risks, but some are riskier than others. Bitcoin has since been one of the most reliable virtual assets, due to its stature as the default currency for other cryptocurrency trades.
BTC dominance typically increases during a bearish market trend, when traders shift value back to the original virtual currency.
Mati Greenspan, eToro’s senior market analyst, explains that “the BTC dominance index is a prime indication of the current market conditions.”
This, however, doesn’t seem to be a negative signal for Bitcoin, and many investors are continuing to buy. BTC has managed to keep prices above the $4,000 mark for the first time this year, and the number of active Bitcoin addresses has increased by 44% since last April.
Greenspan suggested that investors are moving back into alternative digital currencies but are also exercising greater care about which assets to invest in. He said:
“This alt-season is visibly different then the one in 2017. Alternative investors are savvier these days and are picking their projects much more carefully.”
VanEck: Bitcoin is Not Going Away
The major New York City exchange-traded fund (ETF) provider VanEck, has been well publicized lately for their proposal, and subsequent withdrawal then re-application of a Bitcoin ETF. While this might still be in the works, the company recently published a blog post, discussing the longevity that Bitcoin and the crypto industry has, especially with the changes in the industry.
The company’s Director for Digital Asset Strategy at VanEck, Gabor Gurbacs, said that rather than expecting a decisive breakthrough or big “home run” for cryptocurrencies in 2019, look for the industry to continue hitting a number of “singles” with incremental, but major hits. He said:
“With Bitcoin falling from $19,500 to $3,000, some of us may hope that this was indeed a fad and was safely behind us. Yet, there are solid developments from some major companies. The following is a list of recent singles, including announcements, launches, and events that collectively, can contribute to building out the digital assets markets.”
Also, he referred to processes as Square Bitcoin integration, states like Ohio and Indiana accepting Bitcoin tax payments, Samsung bringing digital assets key storage to the masses with their Galaxy S10, Robinhood expanding reach with BitLicense approval, expansion of futures market, NASDAQ bringing surveillance to exchanges, World’s first Crypto Basket Index ETP and Facebook pivoting toward crypto.
Could Bitcoin Rise to $400,000?
ThinkMarkets UK, Chief Market Analyst Naeem Aslam thinks that the 15-month Crypto Winter is coming to an end and the first buds of a Bitcoin bull market have begun to emerge. Noting that Bitcoin recently broke its longest streak of monthly losses, Aslam said that this was the “strongest signal” that the market temperature is climbing and that Crypto Winter is beginning to thaw.
He also notes that the Bitcoin price has crossed its 200-week moving average, which is a significant technical indicator.
“Now, if the price kisses the 50-week moving average goodbye and moves above it at that stage, all bets would be in favour of the bulls. When the price breaks above the 50-week moving average, it sends the strongest bull signal and so far it has worked really well. There is a high chance that the next bull run has a minimum potential of pushing the price 5 times higher. That is over $100K. I personally believe that each Bitcoin can go up as much as $400K and if history repeats itself, this number is not a fool’s paradise,” he said.
