Stack Funds: Bitcoin dominance to bounce back after market slump
Recently, Stack Funds has released a new report anticipating Bitcoin (BTC) dominance is set to bounce back in the near future.
Since the beginning of 2021, Bitcoin dominance — it’s percentage of the total market capitalization of all crypto assets — has been gradually declined from 72.3% in January to roughly 40% this week. The figure has been a three-year low since May 2018, says Stack Funds’ head of research, Lennard Neo.
Although BTC dominance has been decreasing, the total market capitalization of crypto has gone in the opposite direction, in which gaining 40% in value over the same time frame. According to Stack Funds, this means that investors’ capital still remains in the crypto markets. With the rise of Ether’s (ETH) price by almost 180% at last month’s highs, Neo indicates that the key sectoral rotation has been at play where investors seeking to maximize opportunity costs.
However, Stack Funds believes that the dynamics between dominance and the wider markets suggest a swing back in trend. BTC dominance is long due for a rebound:
“ We believe the rotational playbook has reversed as dark clouds loom over the markets. We are expecting investors to cycle back into Bitcoin as uncertainties increases as the markets undergo another reset. Hence, a bounce in Bitcoin dominance should occur, further supporting Bitcoin’s price in the short-term.” — says Lennard Neo.
The report also indicates that the dramatic volatility of the cryptocurrency in the past week was due to the impact of comments from Elon Musk and his company Tesla, as well as bearish news of a potentially renewed crypto crackdown in China.
Source from: https://cointelegraph.com/news/bitcoin-dominance-likely-to-bounce-back-after-market-slump-report
