Key Takeaways
- BTC has been trading around $111,000 and may soon consolidate, allowing altcoins to recover.
- Bitcoin dominance has fallen to 55% as demand for altcoins increases.
BTC stalls near $111,000 as altcoin demand rises
Bitcoin, the largest cryptocurrency by market capitalization, has been trading around $111,000 over the past two days. This level holds despite gains across many altcoins, with Ether approaching $4,500 after climbing more than 1%.
Bitcoin’s stagnation has coincided with a decline in its dominance. Bitcoin dominance has dropped from a recent peak of 62% to about 55%, suggesting that investors may be rotating funds out of Bitcoin and into altcoins.
Bitcoin dominance measures Bitcoin’s market capitalization as a percentage of the entire cryptocurrency market. This metric helps investors determine whether Bitcoin is being favored at a given moment or if altcoins are drawing more capital.
In an email to Coinjournal, Sergei Gorev, Head of Risk at YouHodler, noted that BTC price dynamics have historically tended to follow M2 growth trends. Gorev added:
This divergence may be due to the local summer holiday season, and with the start of autumn the BTC price could realign. We believe the strengthening position of second-tier coins is a fairly long-term trend. First, it reflects the market reallocating profits from early BTC investors, and second, it could lead to the creation of crypto reserves in the most liquid projects, attracting a broad range of institutional investors willing to deploy billions. We think SOL and XRP could be the next interesting market ideas.
BTC still targets $113,000 despite falling dominance
The BTC/USD 4-hour chart has improved compared with the bearish price action in August. Technical indicators are starting to turn positive, with the RSI at 59 signaling that sellers are no longer fully in control.
If the recovery continues, BTC could attempt to breach the 4-hour resistance and trendline near $113,487. A successful breakout above that level would clear the way for BTC to retake the $117,000 resistance with relative ease.
However, given ongoing market nervousness, BTC could also experience a downward correction toward Monday’s low around $107,250.