Bitcoin nears ‘51% attack’ on altcoin market.
The percentage of Bitcoin (BTC) in the cryptocurrency market has increased to nearly 50% after the recent decline in altcoin markets.
On June 13th, the Bitcoin Dominance Index (BTC.D), which measures BTC’s weight against other cryptocurrencies, reached 49.29%, slightly down from its two-year high of 49.66% earlier this week.
BTC not an “unregistered security”
The increase in Bitcoin dominance follows the lawsuit filed by the United States Securities and Exchange Commission (SEC) against crypto exchanges Binance and Coinbase. The commission accused many leading altcoins, including Cardano (ADA) and Solana (SOL), of being “unregistered securities” in its court filings.
- Solana price drops below March low. Possible further drop expected.
- Binance lawyers dispute SEC’s claim that Binance.US customers’ assets are in danger.
- Binance.US refutes motion to freeze funds, stating all of the SEC’s claims fail.
Related: SEC’s Gensler says BTC, ETH ‘not securities’ in a newly surfaced video
Bitcoin’s market share typically rises during high market stress, as traders view it as the least volatile and non-stablecoin crypto asset compared to most cryptocurrencies. For example, during the banking crisis in March 2023, Bitcoin’s dominance over altcoins rebounded to 50%.
There are also other indicators suggesting that Bitcoin’s dominance could increase further and finally break the 50% mark.
For instance, crypto market maker DWF Labs reportedly sent millions of dollars worth of non-Bitcoin tokens to exchanges, 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.
However, not everyone is optimistic about BTC dominance. Fellow analyst Moustache, for example, argues that the altcoin market may have bottomed out 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
Technical analysis suggests that Bitcoin’s dominance may 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).
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 itself, Bitcoin’s dominance will decline towards 39% by late 2023 or early 2024.
On the other hand, a breakout here will be key for BTC, and it could 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.
