Bitcoin Dominance Drops To 42% As Price Drops Below $43,000
Bitcoin has continued its descent to $40,000, proving that the turnaround was only temporary. While there isn’t enough to rule out another recovery, the current trend points to more downsides before the digital asset can gain a foothold and recover above $44K. This hard-won resistance point that the cryptocurrency had managed to beat is becoming increasingly elusive.
The decline is also reflected in the digital asset market dominance. Bitcoin, which retains a majority share of the crypto market, continues to see fierce competition from other digital assets. As investors have moved to altcoins for profit, so has market share.
Bitcoin market dominance is declining
Bitcoin had started the year 2022 on a low note. It was a tough month for the digital asset at the time and the effects of the December crash were still being felt in the market. Not only had the digital asset’s price taken a hit, but its market dominance also suffered, pushing it below 40% for the first time in more than six months.
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After that it was quickly recovered, but not much. It had risen to a high of 43.46% at the start of the week following the market recovery. This would prove to be short-lived as altcoins once again faced fierce competition. Networks such as Ethereum and Solana are leading the way with a wide variety of DeFi and NFT offerings.
Bitcoin’s dominance declined rapidly thereafter. Crashed from its peak of 43.46% to its current position at 42.51%.
BTC dominance drops to 42% | Source: Market Cap BTC Dominance on TradingView.com
Despite this decline, BTC still retains the majority of the market. The pioneer cryptocurrency is still a market leader and its movements on the charts are closely mirrored by altcoins in the space.
Losing foot for $44K
Bitcoin at 44K is an important price point for the asset. It may not indicate that the bull rally has returned, but it does show significant move towards the $45K-$46K, which would mark a new entry into the bull market. Although the asset traded above 44K for most of yesterday, it saw $2,000 losses in the early mornings of Thursday before crashing to the low $42,000s.
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This has led to a decline in the digital asset’s strength as it now only trades above the 20-day moving average. With the reading below the 50-day moving average, it indicates a strong move in favor of the bears.
At a close below the 50-day SMA, bitcoin could fall above $40,000. While it is still a significant price point, there is not enough support for BTC below this point. The next support level is at $42,027 with a major resistance at $44,767.
Featured image of MARCA, chart from TradingView.com