Bitcoin price gains of 3% lead cryptocurrency markets higher.
Bitcoin’s dominance over the rest of the digital currencies continues to expand during recent days in the crypto market. The current rally in the price of the queen cryptocurrency is leading to an expansion of its power against altcoins. In this last group, some managed to maintain a firm pace, but the vast majority could not withstand the pressure of a market with few investors.
The fact that investors are still not sure what is going to happen with the SEC is cause for great caution. However, the enthusiasm is such among retailers that the price of BTC is gaining strength and stands at 100% positive performance so far in 2023.
Over the past month, the price of Bitcoin has seen a significant increase. Its price has increased by 30%, reaching a new yearly high of $35,000, 10% above its previous high this year. Interestingly, while Bitcoin’s growth is evident, the broader cryptocurrency market has failed to keep up.
Altcoin Market Capitalization
The Altcoin market capitalization, which is the total market capitalization of cryptocurrencies excluding Bitcoin, has been trading within a descending triangle. This pattern, characterized by its lower highs and equal lows, often indicates a bearish trend in the market, which suggests that sellers are gradually outpacing buyers.
A breakout of this pattern is usually seen as a bullish indicator, with the target being the first peak. In this case, the Altcoin market capitalization would potentially see another 15% increase, matching April’s yearly highs. A similar pattern was observed in the previous cycle, where the Altcoin market capitalization was trading within a falling wedge.
After the breakout, the Altcoin market capitalization saw a 90% increase. These historical trends show the importance of closely monitoring these patterns as potential indicators of market changes.
On the contrary, as the Altcoin market capitalization is reaching lower highs, the Bitcoin price is reaching new yearly highs. This dynamic suggests that Bitcoin is gaining market share against the rest of the cryptocurrency market. This is often referred to as “Bitcoin Season.”
Bitcoin Season
Bitcoin’s market share is 54%, the highest in more than two years. The last time Bitcoin’s market share was at this level was during the 2021 bull market. As that year progressed, the asset began to lose market share as investors turned their attention to coins with lower capitalization, attracted by the prospect of higher returns. Now the trend appears to be reversing. Investors are gravitating back to Bitcoin, attracted by its higher returns than the rest of the cryptocurrency market.
The next resistance is at 58%, so if Bitcoin breaks this mark, it will gain an additional 5% in market share. Historical trends have shown that in the initial phases of bull markets, Bitcoin often takes the lead, as it moves forward to create new all-time highs. This is typically driven through Bitcoin-centric narratives such as the halving, which reduces the new supply of Bitcoin being mined.
This year, increased anticipation surrounds the possible approval of a Bitcoin ETF. If approved, it could pave the way for a wider range of investors to interact with the asset.
Even during the dominant ‘Bitcoin Season’, certain Altcoins have managed to show even more impressive performances. Some notable ones are as follows: Injective: +74% Solana: +68% PEPE: +67% YIELD: +45% Chainlink: +45% Investment
By Leonardo Pérez
