Crypto Investors Find Safety In Stablecoins, Bitcoin, Ditch Altcoins En Masse
June 07 2022 - 6:00PM
NEWSBTC
Bitcoin dominance is soaring as the overall crypto market bleeds.
The current macro conditions have forced investors to take refuge
in BTC and stablecoins. Related Reading | Glassnode: Bitcoin
Long-Term Holders Own 90% Of Supply In Profit Bitcoin dominance has
been on the rise since May this year after moving sideways in
previous months. The metric, used to measure the percentage of the
crypto market cap formed by Bitcoin, stands at 47% approaching
levels last seen in November 2021. During this period, BTC’s price
took a final move to the upside and reached $69,000 before an
overall market crash took it to its year-over-year low at $24,000
in May 2022. According to a recent report posted by Arcane
Research, dominance across BTC, USDT, and USDC hints at a
de-risking market: Currently the combined dominance of BTC, USDT,
USDC, and BUSD sits at 59.2%, which is the highest dominance seen
by this “flight to safety bundle” since early April 2021. 59.2% is
still 5-10% shy of the dominance throughout most of 2020. At that
time, Bitcoin dominance alone sat north of 60%. The boom in
non-fungible tokens (NFTs), rise in popularity of decentralized
finance (DeFi) protocols, memecoins like DOGE and SHIB, contributed
to the decline in this metric and drove the total market cap for
cryptocurrencies to above $2 trillion. Arcane Research added that
Bitcoin, Ethereum, and popular stablecoins have over 77% of crypto
market cap dominance. This hints at a bleak picture for altcoins as
investors attempt to preserve wealth from further downside. What
once were hot sectors in the crypto space, NFTs and DeFi protocols,
took the biggest hit in the current drawdown. As seen below, NFT
collections like Bored Ape Yacht Club (BAYC), and CryptoPunks,
along with Solana (SOL), Avalanche (AVAX), Yearn Finance (YFI), and
Terra (LUNA Classic) have been the biggest loser in past months.
The losses go from 100% to 58% in the best of cases. While Crypto
Bleeds, Bitcoin On Its Way To $34,000? The above suggests traders
might consider leaving the altcoin market until conditions favor
them again. In the meantime, Bitcoin dominance could continue its
uptrend and return to its 2020 above of 60%. Related Reading
| $127 Million In Bitcoin And Ethereum Positions Liquidated
Amid Market Drop In addition, BTC’s price could see some relief
after a week of crab-like price action. On this note, economist
Michaël van de Poppe said the following, with a more optimistic
prediction for altcoins during June: Easy, the odds for a relief
rally this month are increasing as #Bitcoin recovered this entire
move. Altcoins on the daily timeframe is also starting to look
better. This could be a relief rally of 50-100% on them. Be ready.
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