Bitcoin leads with over 50% dominance, asserting its safety, while Ethereum and altcoins encounter hurdles in a volatile market
In a world of fluctuating cryptocurrencies, Bitcoin (BTC) stands strong, weathering the storm of market volatility. Ethereum and other altcoins struggle to maintain their positions; Bitcoin’s dominance skyrockets, exceeding 50% from its 38% position at the outset of 2023, showcasing its enduring strength in the crypto arena.
Bitcoin’s remarkable resilience and outperformance compared to alternative cryptocurrencies have once again reinforced its historical reputation as a haven asset. Some experts even view it as a valuable diversification option for traditional market investments. Caroline Mauron, co-founder of OrBit Markets, a digital-asset derivatives liquidity provider, echoes this sentiment.
Bitcoin has had an impressive year so far, witnessing a staggering 66% increase in value, while Ethereum has managed a comparatively modest 32% rise. The divergence becomes even more evident when analyzing data from September 15, 2022, following Ethereum’s highly anticipated network upgrade, known as “the Merge,” which had investors on the edge of their seats. In a recent report by Kaiko, they noted:
“In fact, Ether has been massively underperforming the broad market since the Merge, with both the ETH/BTC price and volume ratio trending downwards over the past year. Ether’s underperformance is likely due to the ongoing impact of the bear market, which historically has seen traders turn to Bitcoin.”
As of the latest update, Bitcoin (BTC) is priced at $27,599, registering a marginal 1.10% decline, holding a market cap of $538 billion. Notable analyst @ali_charts highlights a breakdown on the 2-hour chart, revealing Bitcoin’s departure from the symmetrical triangle pattern, identifying the next support level at $26,200.
Bitcoin Thrives While Ethereum’s Market Share Falls
The second-largest cryptocurrency by market, Ethereum value has declined approximately 18% since June, while Bitcoin’s drop during the same period was merely half of that. Ethereum’s market dominance in the $1 trillion crypto market has also dwindled, sliding from around 18.4% at the start of the year to 17.8%.
Recent weeks have given rise to concerns about Ethereum’s growth and prospects. Activity and transaction fees on the network have decreased, and the coin’s supply has increased after several months of deflation. Fears of centralization within the Ethereum network have been steadily growing.
At the time of writing, the price of ETH is down by 2.73%, slipping below the $1,600 mark. As per a renowned crypto analyst insight, significant ETH holders, often dubbed ‘whales,’ have leveraged the period since February 2023 to sell or distribute more than 5 million ETH, amounting to approximately $8.5 billion. This selling trend continues, with no indications of accumulation.
Despite introducing exchange-traded funds (ETFs) focused on Ether futures in the US in October, they have failed to gain substantial traction. This outcome is a setback for the argument that crypto adoption is inevitably expanding.