Although Bitcoin is trying to make short-term upward movements, it is currently maintaining its horizontal motion at $ 30,000. The bulls now expect a breakout around $ 40,000, the previous support level turned into resistance.
However, while the outlook in the Bitcoin market was declining, altcoins saw corrections of up to 40%. Ethereum (ETH), Polkadot (DOT), and Binance Coin (BNB) recorded the worst performance in the top 10, with adjustments of 42.4%, 36%, and 48.1%, respectively. Similarly, Cardano (ADA), Dogecoin, and XRP saw similar corrections.
As a result, Bitcoin dominance rose from below 40% to 46.49%. Bitcoin’s dominance rate is an indicator of what percentage of the leading cryptocurrency makes up the total cryptocurrency market. Basically, a rising dominance rate means that the demand for Bitcoin is greater than the demand for altcoins. If BTC’s price action continues to move sideways and consolidates around $ 40,000, this metric could rise further in the coming weeks. The current increase in Bitcoin dominance was recently predicted by crypto access products maker Stack Funds. In a statement made a few days ago, the firm said:
“In this period when uncertainties are increasing and markets are zeroing, we expect investors to turn to Bitcoin again. Therefore, Bitcoin’s market dominance will also experience a rebound and will support the BTC price in the short term. ”
As the price of BTC drops, investors can exit altcoin positions until there is more certainty in the market. The correlation can be a good indicator for finding BTC’s price bases, as shared by Teddy Vallee, CIO of Pervalle Global, and shown in the graph below.
— Teddy Vallee (@TeddyVallee) May 22, 2021
CoinMamba (@coinmamba), also one of the popular crypto traders, expressed their expectations for market dominance as follows:
“As expected, BTC looks stronger than altcoins. I think people are turning to Bitcoin to reduce risk. BTC dominance is likely to increase from here. Trade accordingly. “