Bitcoin dominance exceeds 50%
NAIROBI (Coinchapter.com) – Bitcoin (BTC) has reclaimed its position as the king of cryptocurrencies, with Bitcoin’s share exceeding 50%. This recovery comes at the same time as the total cryptocurrency market capitalization approaches its all-time peak. Although altcoins usually take the spotlight during a bull run, Bitcoin has been leading the current rally since September 2023.
Source: Ecoinometrics
The rise was driven by the approval of Bitcoin spot exchange-traded funds (ETFs) in the United States, which boosted trading volumes. Trading platforms like Bybit witnessed a surge in Bitcoin activity, solidifying Bitcoin’s dominance at over 50%. As a result, second-layer solutions designed to enhance Bitcoin’s scalability have attracted widespread attention.
Potential bullish catalyst: Consumer Price Index (CPI) data
The upcoming release of the Consumer Price Index (CPI) data this Wednesday could be a pivotal moment for Bitcoin and the entire cryptocurrency market. If the CPI report shows lower-than-expected inflation, it could create a bullish scenario for Bitcoin. Such an outcome could prompt the Federal Reserve to consider lowering interest rates, an action that historically has spurred investment in risky assets like cryptocurrencies.
On the contrary, if the CPI data is disappointing and the inflation data is high, the market may face downward pressure. Therefore, this key economic indicator has a significant influence on the price trend of Bitcoin and may trigger a rapid market reaction.
Technical indicators suggest Bitcoin could breakout
Bitcoin is trading at $62,891.84, up 2.32% in the past 24 hours. This uptrend suggests that Bitcoin has recovered well from the recent support level of $60,000. On the 4-hour chart, Bitcoin is currently testing the short-term resistance level of around $63,500.
The relative strength index (RSI), a key indicator of momentum, has risen above the threshold of 50%, indicating increased buying activity and the presence of bullish momentum in the market. The rise in the RSI coincides with the price rebounding from the $60,000 support level, suggesting that investor bullish sentiment may be strong enough to challenge and possibly exceed the $63,500 resistance level.
Source: TradingView
On the daily chart, Bitcoin price is trapped in a large descending channel pattern, forming lower highs and lower lows. While some view the recent price action as a bearish reversal and downtrend, the momentum is not overly bearish. The $60,000 support area has supported the price multiple times, and the market seems to be targeting the upper boundary of the channel.
A breakout of the pattern could signal a new bullish trend whereas a breakout below it would be disastrous, potentially causing the market to crash towards the $52,000 support level.