The crypto industry has abruptly shifted back to BTC after the dominance of the decentralized finance (DeFi) passion for many months. The BTC market cap control has kept to near 60% this month. Meanwhile, the trading supremacy of Bitcoin has sky-rocketed to a level not appeared from 2017 the time that we would see the $20K price.
Because of the growing market volume of BTC, the altcoin market stops flowing as well as its leader the Bitcoin. The trading authority of the head for altcoins, Ether, for example, did not meet alike thorn in a similar duration.
Why the altcoins movements oppose the Bitcoin spikes?
It is crystal clear since July to the beginning of September, when Bitcoin is ascending steadily, it is able to bring about an “altseason” to appear. Actually, Ether has outperformed Bitcoin up to now in the current year in terms of percentage, which is moderately the reason that the momentum could be reverting to BTC.
Particularly in August, several DeFi coins grew from 5 to 20-fold, producing a huge altcoin trend.
But while the BTC price rises rapidly in little time, it is capable of triggering the altcoin market to fall. Profits are possibly steering from altcoins back into stablecoins and Bitcoin, keeping Bitcoin to compete by itself.
Su Zhu, the CEO of Three Arrows Capital, highlighted that when the BTC grows swiftly altcoins would slump. He added:
“Bitcoin price increasing quickly is not only not supportive of altcoins but it’s bearish. Details for this phenomenon are countless but derive from the reason that money is a proportion game and BTC is the Schelling point; this is regardless of your sentiments and the cryptocurrency community is factually unrelated.”
A comparable trend has been marked through chief crypto exchanges. On Huobi, the trading volume’s market share of BTC has been snowballing, as revealed by the data from Skew.
The trading data on Huobi is substantial as the company owns 1.1% of the BTC supply in its cold storage wallets. It has become one of the main cryptocurrency exchanges in the world for its cryptocurrency reserves, together with OKEx and Binance.
What does this demonstrate for Bitcoin?
In the last 13 days, the BTC price has grown by over 12% vs. the USD. The robust presentation of Bitcoin arises when a sequence of negative circumstances occur that could have produced a strong pullback.
As Cointelegraph broadly reported, numerous exchange-related newscast, containing the interruption of withdrawals by OKEx, triggered Bitcoin to decline below $11,300. In spite of the indecision in the market and the fall of U.S. equities, Bitcoin moved overhead $11,700.
Experts continue to be fairly confident in the optimistic medium-term path of BTC. But if Bitcoin pulls back in the little period while the market pursues sedation, it may source a greater correction for alts.
Michael van de Poppe, a full-time trader at the Amsterdam Stock Exchange, believes Bitcoin could probably descent back to $11,100. Discussing the diagram that assumes a Bitcoin correction to $11.1K. He mentioned:
“Still standing behind this view, there’s such a giant obstacle about to happen for Bitcoin Price.”