Bitcoin continues to hold key support above the $6,000 mark while the altcoin market hemorrhages.
At the time of this writing, Bitcoin (BTC) is trading at $6,407.73, up 1.77 percent over the last 24 hours. However, this last week of price action — or lack thereof — has been nothing to write home about. Over the last seven days, Bitcoin is down 0.61 percent.
Altcoins are another story, entirely.
Ethereum (ETH) is down 17.04 percent over the last seven days after smashing through the key psychological support number of $200 per coin. Controversial altcoin Bitcoin Cash (BCH) — which claims to be ‘Satoshi’s Real Vision’ — is down 13.54 percent over the same period. Cardano (ADA), meanwhile, is down a staggering 22.19 percent.
The heavy bleeding in the altcoin market has naturally increased Bitcoin’s dominance substantially.
As illustrated in the chart from CoinMarketCap below, Bitcoin once again reigns supreme as its dominance approaches 60 percent. Before this bear market is over, it stands to reason that Bitcoin dominance could easily reach levels as high as 70 or 80 percent.
It would be wise not to take Bitcoin’s increasing dominance as a bullish sign for the market leader.
Bitcoin’s dominance tends to increase when the first and foremost cryptocurrency sees declines in prices. The reason for this is simple: where Bitcoin goes, altcoins generally follow — to an extreme. Thus, one may interpret Bitcoin’s increased dominance as a sign that the marketwide bear market has not concluded.
The reason Bitcoin outperforms in dire times is that the market leader is seen as the safest and most stable of the leading cryptocurrencies (excluding ‘stablecoins,’ of course). Marouane Garcon, managing director of crypto-to-crypto derivatives platform Amulet, explained to Forbes:
Bitcoin drives the market. If Bitcoin isn’t doing well then the alts typically don’t do well. If Bitcoin is doing well then everyone dumps their alt coins and converts to Bitcoin.
Should Bitcoin smash down through key support at $6,000 — which is a very real possibility — it stands to reason that altcoins will continue to get absolutely slaughtered as BTC heads down towards $5,000. In that case, traders might want to consider just sticking to fiat.
What do you think of Bitcoin’s increasing dominance and the state of the cryptocurrency market? Will Bitcoin continue to hold support above $6,000? Let us know your thoughts in the comments below!
Images courtesy of Shutterstock, CoinMarketCap.
[Disclaimer: This article is not intended as financial advice. BeInCrypto is not responsible for any investment decisions made by anyone who has read this article.]