Wherever the big guy goes, the little guys will follow. That seems to be a pretty good analogy for how Bitcoin directs the pace and direction of the cryptocurrency space in general. But how does Bitcoin dominance actually affect the overall picture and what am I talking about to begin with eh?
To get technical with folks, Bitcoin (BTC) dominance is the percentage of cryptocurrency’s total market capitalization accounted for by Bitcoin. And guess what folks, it has reached a 3 month high...
According to CoinMarketCap, BTC dominance is now 42.6% of the market, its highest since April 15th. Its increase has occurred at the same time as the market’s total value experienced a downtrend.
Since the 9th of June, cryptocurrency’s total market cap has fallen by around 25% from around $340bn to its present valuation of $256bn: a near $100bn loss. BTC dominance has risen by 3% in the past two weeks and by around 4% since the beginning of the month.
So, now we must ask, how can this information benefit us in any way shape or form? Or is this simply an uncorrelated event we should ignore?
Bitcoin's recent decline from $7,603 to $6,600 is below that of the market in general meaning alts took a much harder beating. This suggests investors are buying more BTC than other cryptocurrencies.
It is important to note that Bitcoin is often the ‘gateway coin’ for a lot of investors; they buy BTC before purchasing other coins. So if you want to buy anything in the market, you must first buy Bitcoin.
We may be looking at a little bounce before continuing with the bear market that has plagued the space all year or this may be the beginning of recovery. Time will tell..
Now I want to turn the tables and ask readers what they expect to see for the last half of the year in regard to Bitcoin and other cryptocurrencies.
Please leave your thoughts and comments below.
Source:
Why Bitcoin Dominance Is A Big Deal - Cryptobriefing
Image Source:
Cryptobriefing