Category Archives: Bitcoin dominance

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Bitcoin Correlation with Altcoin Wanes in 2019

Bitcoin Correlation with Altcoin Wanes in 2019

A new study from Binance Research shows growing evidence that Bitcoin’s correlation with other crypto has become less and less apparent, at least in Q2 2019.

Bitcoin price is generally found to be in close correlation with altcoin prices. When Bitcoin is on a bull run, such as in 2017, altcoins also tend to move in parabolic patterns, and when Bitcoin does the inverse, altcoins usually do too. The only difference is in the magnitude, where altcoins tend to rise and fall in far stronger patterns than Bitcoin.

The research arm of crypto exchange giant Binance published its 2019 Q2 Crypto-Correlations Review, which highlights how this is now the third best quarter that the industry has ever seen since 2014. It is also the quarter with the highest growth seen since the period of the bull run in 2017.

Bitcoin’s rise in US dollar valuation took the world by surprise in this period, increasing by over 300% and pushing its market dominance (by share of market capitalization) to above 60%, while creating new repeated and consecutive milestones in highs for 2019. These strong indicators of Bitcoin strength all played their part in significantly decreasing Bitcoin’s correlation with other digital assets.

The report noted:

“Correlations declined between Bitcoin and altcoins, with a decrease in average correlation of -0.11. The overall market capitalization rose by 139%, whereas altcoin aggregated market capitalization (including stablecoins) increased by ‘just’ 71% over the same period.”

The report also observed a decreasing correlation with some Proof-Of-Work crypto assets such as Bitcoin Cash, Dogecoin, Ethereum Classic, Bitcoin Gold, and more, which provided average correlations that were lower than before, whereas privacy coins like Monero displayed higher than average correlations with each other.

 

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Bitcoin Dominance Crests Over 60%, Highest in 2 Years

Bitcoin Dominance Crests Over 60%, Highest in 2 Years

Bitcoin market dominance has trudged over the line, marking over 60% for the first time in over two years, as a continued rally past USD 12,000 is underway.

BitcoinNews.com had reported yesterday that dominance stood at exactly 60% (CoinMarketCap) but in the past 24 hours since, increasing US dollar valuations, coupled with a downward retracement for most of the major altcoins, have ensured that Bitcoin dominance comes into play once more.

These levels were last seen immediately after Bitcoin’s last parabolic run in late 2017 and early 2018. And, similarly, altcoins were the ones to pay for this dominance, with their value dropping far more spectacularly than Bitcoin throughout 2018.

As Bitcoin price also now stands above 60% of its all-time high near USD 20,000, few altcoins have managed to show the same recovery. For example, despite hitting a 2019 high with USD 336, Ether (ETH) is still yet to recover to even 25% of its all-time high above USD 1,400. Others like Ripple (XRP), while enjoying green lines this year, is still at about USD 0.46, a pale 12% of its all-time high at USD 3.84.

Bitcoin market capitalization is now at USD 226 billion, with the total crypto cap at USD 365 billion.

Even with this totals, Bitcoin maximalists are reluctant to trust CoinMarketCap statistics too much, believing the actual number to be much higher. Some think it could be as much as 95%:

Market dominance back above 60%!

PS: This number is based on CMC which is heavily manipulated. The real dominance is closer to 95%. 😐🍻#bitcoin

— A v B (@ArminVanBitcoin) June 25, 2019

That opinion might hold some weight, if data manipulation is rife, although other data analytics sites such as CoinCodex and Cointrader also show the same dominance figures.

For those who have always believed that Bitcoin comes first, this can only spell more good news in the near time to come. Altcoin traders will hope this is only a temporary thing, however, with the much-anticipated alt spring yet to arrive.

 

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