In a notable resurgence, Bitcoin (BTC), the pioneering cryptocurrency and the market leader by capitalization, has surged in dominance, capturing 50% of the cryptocurrency market. This comes as the digital currency briefly touched the $27,000 price level earlier this week, signaling renewed optimism among investors after a period of trading below the $26,000 threshold.
The initial surge to $27,000 was short-lived, with BTC retracing to the $26,000 level within hours. However, this movement underscores Bitcoin's continued dominance in the crypto market, a metric that gauges BTC's market cap in relation to the total value of all digital assets. Over the past week alone, Bitcoin's dominance has risen from 49.5% to 50%.
A significant factor influencing this market trajectory is the recent approval granted to FTX, a major digital asset exchange that declared bankruptcy in November 2022. The exchange has been greenlit to liquidate a staggering $3.4 billion in digital assets, which includes $560 million in Bitcoin and $192 million in Ethereum. Matteo Greco, a Research Analyst at Fineqia International, highlighted that while Bitcoin and Ethereum possess the market depth to absorb such sales without drastic price impacts, the same cannot be said for less liquid altcoins. This has led to a disproportionate selling pressure on altcoins compared to Bitcoin, further boosting BTC's dominance.
Furthermore, market activity, which had seen a decline during the summer, appears to be on the upswing. Greco pointed out that the cumulative daily volume on centralized exchanges, based on a 7-day moving average, exceeded $10 billion, marking a 19% increase from the previous week. However, Greco also cautioned investors about potential volatility spikes, especially with the upcoming US Federal Committee's decision on interest rates.
Faraj Abutalibov, Chief Commercial Officer of Venom Foundation, provided insights into Bitcoin's historical performance, noting that September has traditionally been a weaker month for BTC, while October has often seen stronger results. Based on current market dynamics, including the aggressive push for Bitcoin ETFs and the impending Bitcoin halving event, Abutalibov anticipates a potential uptrend for BTC, possibly nearing the $30,000 mark. However, he also warned of heightened volatility leading up to the Bitcoin halving event and emphasized the importance of monitoring global macroeconomic trends.
As of the latest data, Bitcoin was trading at $26,824.10, with a 24-hour trading volume of $15.11 billion, marking a 0.57% increase in the last 24 hours and a 4.2% gain over the past week. With a current market cap of 522.8 billion, Bitcoin's trajectory remains a focal point for investors and market analysts alike, as they navigate the ever-evolving cryptocurrency landscape.