Key Takeaways
- BTC has been trading around $111,000 and may consolidate soon, creating room for altcoins to advance.
- Bitcoin dominance has fallen to 55% amid growing demand for altcoins.
BTC stalls around $111K as altcoin demand rises
Bitcoin, the largest cryptocurrency by market capitalization, has been trading near $111,000 over the past two days. This relative stall occurs alongside strength in altcoins, with Ether approaching $4,500 after gaining more than 1%.
The pause in Bitcoin’s momentum coincides with a decline in its dominance. Bitcoin dominance has dropped from a peak near 62% down to about 55%, suggesting that investors may be reallocating capital from Bitcoin into altcoins.
Bitcoin dominance measures Bitcoin’s market capitalization as a percentage of the total cryptocurrency market cap. This metric helps investors gauge whether Bitcoin or altcoins are currently favored.
In a note to Coinjournal, Sergei Gorev, Head of Risk at YouHodler, said that historically BTC price dynamics have tended to follow the growth of M2 money supply. Gorev added that
“This divergence may be influenced by the local summer holiday season, and with the start of the autumn business period, BTC prices could resume an upward trajectory. In our view, the consolidation of second-tier coins is likely to be a medium- to long-term trend. This is partly due to the market redistribution of profits by early BTC investors and partly because future crypto reserves may be built in the most liquid crypto projects, which can attract a broad base of institutional investors willing to commit billions. We believe promising market ideas include SOL and XRP.”
BTC still targeting $113K despite lower dominance
The BTC/USD 4-hour chart shows improvement compared with the downward price action in August. Technical indicators have started to turn bullish, with the RSI at 59 signaling that sellers have lost some control.
If the recovery continues, BTC could attempt to break the 4-hour resistance and trendline near $113,487. A move above that level would open the way for BTC to challenge the next resistance around $117,000.
However, with the market still volatile, BTC could also face a downside correction and retreat to Monday’s low near $107,250.