On Saturday, Bitcoin encountered resistance around the $30,000 mark while its dominance index reached a two-year high. The BTC.D chart from Tradingview, which represents Bitcoin's portion of the total cryptocurrency market value, currently stands above 52%. This dominance rate peaked at 52.72% on October 21, marking a record not witnessed since April 2021.
The BTC.D has seen a substantial rise from an early-year figure of 38%, in line with an 81% increase in Bitcoin's price since January. Crypto analyst Rebecca Steven attributes this surge in BTC.D to Bitcoin's resilience and consistent top-tier performance in the current market. According to Steven, high inflation rates, geopolitical unrest, and a fragmented US government are motivating investors to adopt risk mitigation strategies.
Steven also underscored the impending approval of a spot Bitcoin ETF as a factor enhancing Bitcoin's attractiveness. She suggests that Bitcoin is acting as an ideological shield against global instability, thereby boosting its growing dominance in the cryptocurrency market.
This rise in dominance reflects Bitcoin's stake in the total cryptocurrency market value and indicates its supremacy over altcoins. However, it doesn't entirely represent all cryptocurrency market dynamics. For example, a decrease in Bitcoin dominance could signify investors diversifying their portfolios with altcoins. On the other hand, an increase in Bitcoin dominance could point to investors' growing confidence and resource allocation towards Bitcoin.
Therefore, investors and analysts utilize various market indicators to understand comprehensively the health and trends of the cryptocurrency market.
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