HomeCryptoBitcoin price rebounds as crypto market lags behind

Bitcoin price rebounds as crypto market lags behind

The past five days have seen a real rebound in Bitcoin price

Last Thursday it was around $25,000, while today it has climbed back up to around $27,000. 

These are two key levels that mean that this rebound cannot be downgraded to a mere ordinary movement in Bitcoin’s price. 

Bitcoin long phase of price lateralization

After closing 2022 at $16,500, Bitcoin’s price in early 2023 had begun to rise, eventually returning above $27,000 on 17 March. 

Since then it in fact began a long phase of lateralization that is still ongoing. 

However, this was not a long period in which the price remained stable at $27,000, but a succession of declines and rises that always had this threshold as the central level. 

While mid-April saw the 2023 annual highs above $31,000, last week saw the lows of this lateralization phase that has been going on for more than three months. 

So not only is $27,000 an important level because it is the threshold around which the price of BTC has been oscillating for more than three months, but $25,000 is also an important threshold because it is a kind of medium-term support below which it would be better for the price not to fall. 

That is, as long as Bitcoin can stay around or above $25,000, there seems to be no serious risk of further collapse. 

By contrast, if that support were to collapse altogether then a return to $22,000 or $20,000 would also be possible. In that case the ongoing lateralization would be broken downward. 

Bitcoin dominance

Something much more important has also occurred in recent days. 

Examining Bitcoin’s dominance as calculated by TradingView, we see that it has risen above 50% for the first time since April 2021. 

Put another way, right now according to TradingView, BTC’s market capitalization would be greater than that of all other cryptocurrencies combined. 

The figure calculated by TradingView is not the only one, because depending on which cryptocurrencies one takes into consideration, and how their market capitalization is calculated, one can get different results. 

For example, if you also consider stablecoins you get decidedly different results, so if you also take into account the market capitalizations of tokens from now-dead projects, such as FTX or Luna Classic. 

However, what matters is not the size of the percentage, but its trend over time. 

The fact is that in April 2021, when Bitcoin’s dominance was similar to what it is now, it was in the midst of a bull run. From late April 2021, when the focus shifted to altcoins, dominance began to fall, and remained low until January 2023, when it was still at 41%. 

By February it had risen to 44%, and by March to 47%. 

The latest rise has occurred in the past two scarce weeks, which is since many have realized that several altcoins are at risk of being recognized as unregistered securities. 

In other words, some capital over the past few months is moving from altcoins to Bitcoin, and this increases both its dominance and its price. 

The commentary

According to Fineqia International analyst Matteo Greco, after the strong downtrend in the first week of June, a rebound was indeed expected, mainly due to good news from the macroeconomic side. 

However, there has not yet been a real positive response from investors toward risk-on assets.

Bitcoin’s dominance tends to increase when investors do not feel confident about the short-term market trend, so they adjust their positions according to a less speculative strategy. They typically do this by increasing their exposure on BTC, since among cryptocurrencies it is the least volatile.

Greco says: 

“At this stage, it is crucial to pay attention to the next SEC actions. It is difficult to predict what is going to happen, but surely the fight between service providers and the regulator is hurting the US digital asset market, with investors and entities that are leaving the country or reducing the size of operations, waiting for more clarity. This can be appreciated analysing the Euro market share on centralised exchanges, in proportion to US Dollar transactions. Euro market share is now 18%, up from just 9% at the start of the year relative to the US Dollar.”

Marco Cavicchioli
Marco Cavicchioli
Born in 1975, Marco has been the first to talk about Bitcoin on YouTube in Italy. He founded ilBitcoin.news and the Facebook group" Bitcoin Italia (open and without scam) ".