Bitcoin market share hit a 3-month high amid underperformance of altcoins. Despite that, geopolitical tensions could cause wild fluctuations.
On-chain data shows that Bitcoin market shares have surpassed 50%, the highest level in the last three months. The price of the largest cryptocurrency is around $27,590, up almost 7% in a month.
The new war in the Middle East seems serious. There may be consequences at the regional level. At the moment, cryptocurrencies are under pressure. However, with the arrival of an American carrier strike group, it is unknown how things will develop.
BTC Dominance Strengthens
While Bitcoin’s dominance strengthens, Ethereum and other altcoins have faced setbacks. The second-largest cryptocurrency has seen a drop in its market dominance, going from 19% to around 17% in recent months. Other altcoins have been under enormous selling pressure in recent days.
Ethereum has faced an avalanche of criticism for its increased centralization following the Merge and Shanghai upgrades.
A recent JPMorgan study found that while these updates led to an increase in staking activity, Ethereum has become more centralized since then. The bank also expressed concern about declining betting returns and the risk of remortgage.
MN Trading CEO and founder Michaël van de Poppe said altcoin prices were heavily affected by selling pressure.
The crypto analyst suggested that if Bitcoin managed to climb back above the $28,000 price, it could lead to a price move that would reach between $35,000 and $40,000. He believed that an uptrend could be in play if the price of Bitcoin surpassed $28,000.
According to Glassnode’s Bitcoin Entity Balance Dominance, the dominance of the smallest Bitcoin holders, “shrimps” and “crabs,” is now 10.8% and 6.9%, respectively. The predominance of exchange entities is 11.8%.
However, the power of the currency balance is declining while smaller groups such as crabs and shrimp are gaining more control. This change in ownership dynamics indicates that smaller-scale investors are increasingly accumulating a larger share of the Bitcoin market compared to larger entities such as exchanges.
Bitcoin Volatility May Return
Rumors previously circulated that October would be “Uptober”, but ongoing geopolitical disputes between Israel and Palestine could trigger price volatility. Additionally, rising crude oil prices have put liquidity pressure on Bitcoin and other cryptocurrencies.
Cryptocurrency analyst Miles Deutscher suggested that while there may be initial turbulence in the markets, historical data indicates that they tend to recover relatively quickly after military conflicts. He noted that, in most cases, markets began to show positive trends after three months of uncertainty.
Bitcoin’s price movement may show increased volatility during this period as it has shown a correlation with the S&P 500 index. Additionally, a report from Bitfinex Alpha suggests that Bitcoin’s historical daily volatility remains above its moving 200-day average, indicating the potential for further price fluctuations.
“Bitcoin has been more volatile on average than the last 200 days in the asset’s history,” since the beginning of the month, according to the firm.
Another key event this week is the release of macroeconomic data, including the September Consumer Price Index (CPI) on Thursday. The US Federal Reserve (Fed) can raise interest rates if inflation remains above its target. Changes in interest rates in major economies can have a ripple effect on the broader economy, which can ultimately affect the cryptocurrency market.
By Audy Castaneda
