Bitcoin gets closer to ‘51% attack’ on altcoin market
2023.06.13 10:38
Bitcoin’s (BTC) percentage share in the crypto market has risen to nearly 50% in the aftermath of the last week’s altcoin market rout.
On June 13, the Bitcoin Dominance Index (BTC.D), which tracks BTC’s weight against other cryptocurrencies, reached 49.29%, slightly down from its two-year highs of 49.66% seen earlier this week.
BTC.D daily price chart. Source: TradingView
BTC not an “unregistered security”
The surge in Bitcoin dominance comes after the United States’ Securities and Exchange Commission’s (SEC) lawsuit against the crypto exchanges Binance and Coinbase. In its court filings, the commission accused many leading altcoins, including Cardano (ADA) and Solana (SOL), of being “unregistered securities.”
Related: SEC’s Gensler says BTC, ETH ‘not securities’ in a newly surfaced video
Bitcoin’s market share typically rises during high market stress, given that traders view it as the least volatile, non-stablecoin crypto asset than most cryptocurrencies. For instance, at the height of banking crisis in March 2023, Bitcoin’s dominance versus altcoins had also rebounded to 50%.
Altcoins’ seven-day performance versus the U.S. dollar and Bitcoin. Source: Messari
There’s also other cues suggesting Bitcoin’s dominance could grow further to finally break 50%.
For instance, DWF Labs, a crypto market maker, has reportedly sent millions of dollars worth of non-Bitcoin tokens to exchanges, this potentially adding selling pressure for certain altcoins.
Independent market analyst Stack Hodler also suggests that most crypto hedge funds would first and foremost abandon their altcoin exposure.
But not everyone is bullish on BTC dominance. Fellow analyst Moustache, for example, argues the altcoin market may have bottomed once again as Bitcoin will be unable to break the 50% mark.
#Bitcoin
Is the USDT-Dominance about to fall?
If so, we’re in for a massive Altseason.
-Head and Shoulders pattern forming (W)?
-Stoch RSI heavily overbought.In the last 3 years this has led to an Altseason 4 out of 5 times.
+ Sentiment is in the basement for most = Good. pic.twitter.com/odU5jg8srF
— ⓗ (@el_crypto_prof) June 12, 2023
Bitcoin dominance risks pullback in June
Chart technicals suggest that Bitcoin’s dominance can indeed drop in the coming weeks as altcoins rebound.
Related: ‘There’s no more exciting time than now’ for Bitcoin: BTC Prague 2023
Most notably, BTC.D has failed to close decisively above the 50%-mark since April 2021, often reversing its gains due to an overbought weekly relative strength index (RSI).
BTC.D weekly performance chart. Source: TradingView
Bitcoin now faces a similar scenario with a retest of the 50% level for the first time since last summer. Meanwhile, its RSI hangs just two points below its overbought level of 70.
Therefore, if history repeats, Bitcoin’s dominance will decline toward 39% by late 2023 or early 2024.
On the other hand, a breakout here will be key for BTC — to reach levels not seen in over two years. For example, analyst Crypto Rover sees a classic bullish continuation setup with 52% being the next major hurdle if such a scenario pans out.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
