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Bitcoin (
$76,624.00 ) (BTC) is rapidly regaining its lost dominance in the crypto market so far into 2023.
On Jan. 30, Bitcoin ( $76,624.00 ) accounted for 44.82% of the total crypto market capitalization, the highest since June 2022. In September 2022, Bitcoin ( $76,624.00 ) ’s dominance index was as low as 38.84%.
The index typically rises when most crypto investors reduce their exposure to smaller tokens and seek safety in Bitcoin ( $76,624.00 ) . The reasons include Bitcoin ( $76,624.00 ) ’s better liquidity and lower volatility than alternative cryptocurrencies, or altcoins, primarily in a bear market.
Bitcoin ( $76,624.00 ) ’s market dominance to grow further?
As of Jan. 31, Bitcoin ( $76,624.00 ) is up 38% year-to-date (YTD) at around $23,000. In comparison, the second-largest cryptocurrency, Ether (ETH), gained 30% in the same period, showing most investors remain gravitated toward Bitcoin ( $76,624.00 ) so far in 2023.
From a technical perspective, the Bitcoin ( $76,624.00 ) dominance index may rise further in the coming weeks as it reclaims its 50-week exponential moving average (the red wave in the chart below) as support.
$76,624.00 ) dominance index weekly performance chart. Source: TradingViewIn doing so, the index could rise toward 48.5%, which has acted as resistance since May 2021.
On the other hand, independent market analyst Rekt Capital sees the Bitcoin ( $76,624.00 ) dominance index rising toward 46%, which coincides with the upper trendline of a giant descending channel pattern, as shown in the monthly-timeframe chart below.
$76,624.00 ) dominance index monthly performance chart. Source: TradingView, Rekt CapitalThe short-term bullish scenario in the Bitcoin ( $76,624.00 ) dominance index chart appears in line with a similar upside in the spot Bitcoin ( $76,624.00 ) market, with bulls eyeing a run-up toward $25,000.
The strength of #bitcoin on the 4-hour charts continues to be impressive.
While price action has trended sideways for over a week, short term indicators (MACD, RSI) have once again reset… and are now ramping higher.
A price surge to ~$25k is probable.
(Not investment advice) pic.twitter.com/QaPbNrxtxZ
— Dr. Jeff Ross (@VailshireCap) January 29, 2023
Ethereum (
$2,087.76 ) vs. Bitcoin ( $76,624.00 ) th main driver of BTC dominance
The bearish argument is that the Bitcoin ( $76,624.00 ) dominance index may start losing its upside momentum after testing its descending channel resistance, as it had done on several occasions in the recent past.
Related: Bitcoin ( $76,624.00 ) sees most long liquidations of 2023 as BTC price tags $22.5K
“ Bitcoin ( $76,624.00 ) Dominance is further overextending beyond red on the Monthly TF,” notes Rekt Capital while citing the index’s horizontal trendline support near 44.11%. The analyst adds:
“A Monthly Close above red could set BTCDOM for another dip into red which would benefit Altcoins.”
$76,624.00 ) dominance index monthly price chart (zoomed). Source: TradingView, Rekt CapitalThe above analysis appears as ETH eyes a potential bullish reversal versus Bitcoin ( $76,624.00 ) in the coming weeks.
Notably, the ETH/BTC pair has been consolidating near its support area (purpled) inside the 0.0676- 0.0655 BTC range since Jan. 24.
The ETH/BTC pair will likely see a rebound rally toward its descending trendline resistance (blacked) around 0.075 BTC if it continues to hold the support area. That, in turn, would reduce Bitcoin ( $76,624.00 ) ’s “dominance” in the cryptocurrency market as Ethereum ( $2,087.76 ) ’s share would rise toward 20%.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
