Bitcoin (BTC) seems to be at somewhat of a crossroads following a mini-bull run to break the $7,000-mark last week. Several data points however, show that the cryptocurrency might be on the verge of further gains as it seems to be outstripping major altcoins significantly in recent weeks.
Firstly, looking at data from Bloomberg, we can see that bitcoin’s price rise in the last couple of weeks has been substantially greater than rival coins – with the cryptocurrency rising an impressive 19% in the last week alone – when the MVIS CryptoCompare Digital Assets 100 Index – rose just 0.7 percent in the same period:
Moreover, bitcoin’s price has now spent a full week above its 50-day moving average – managing to sustain the dramatic spike of last Tuesday where it surged over 10% in just an hour:
And it isn’t just in terms of price that bitcoin has recently been storming ahead.
Market capitalisation (or network value as some prefer) has also been swinging heavily towards BTC this year, as twitter-user P.Miller pointed out today looking at data from CoinMarketCap:
6+ month trend since January: Liquidity and value being sucked out of altcoins and into BTC. Despite there being dozens more altcoins launched, the "bitcoin dominance" has increased from 32% to 45%. This shows significant strength of Bitcoin as THE store of value in ecosystem. pic.twitter.com/CQGVTOfSyv— P.Miller (@patmillertime) July 23, 2018
With bitcoin’s share of the total market cap increasing from 35% to 45% since the beginning of the year many have been quick to emphasise how the coin remains the “reserve currency” of the crypto space:
BTC is a store of value. Literally every altcoin is paired with Bitcoin. Binance displays your balance in terms of BTC (even if you only hold USDT). Bitcoin is the reserve currency. https://t.co/T9pYRPlqJJ— grubles (@notgrubles) July 23, 2018
No one is sure at the moment however, what precisely is stimulating the current bullish activity following a bearish few months. Many have speculated that a sizeable ‘short squeeze’ on Tuesday last week drove the initial price spike, while anticipation of SEC approval for a bitcoin ETF (Exchange Traded Fund) might also be driving some of the bullish sentiment.
While today’s news that G20 (Group of 20) ministers do not see crypto-assets as posing a significant risk to global financial stability might also encourage investors, it remains to be seen whether bitcoin can sustain its momentum and push past the $8,000 mark.