On 7th August, Thomas Lee, the Managing Partner and Head of Research at Fundstrat said that the Bitcoin [BTC] dominance is showing that the market is acting to the recent announcements.
During the interview with CNBC Fast Money, Tom Lee also said that Bitcoin was the only game in the cryptocurrency market for a long time. In 2017, the coin had a dominance of 80% in the cryptocurrency market and during the same year, the dominance fell to 37% because of the rise in ICOs and new projects.
“Because last year, we had a lot of ICOs and a lot of new projects and people got very excited and I think a lot of folks thought, this is how the year would play out. The dominance would fall but Bitcoin dominance is actually been creeping up.”
Moreover, the Bitcoin [BTC] dominance went up to its highest value this year, i.e., 49% in the last couple of weeks. The reason for this is the recent announcements in the cryptocurrency market. This includes the Intercontinental Exchange platforms regarding the launch of the new cryptocurrency start-up, Bakkt and the potential of a Bitcoin ETF. Tom also stated that the SEC’s statement that Bitcoin is a commodity has also contributed to the increase in Bitcoin dominance.
He said that this is making the investors decide that Bitcoin is “the best house in the tough market”. So the Bitcoin dominance proves that the cryptocurrency market has been acting to what has been taking place.
Thomas further speaks about the Bitcoin [BTC] misery index. The low price of Bitcoin indicates that people are miserable and the high price indicates that people are in a euphoric state. He said:
“Below 27% means people are so miserable that historically Bitcoin does quite well and when it is high above 67%, it means people are euphoric and generally, thats the time to sell.”
According to him, at present, the Bitcoin misery index is at 37% and is going up. This means that the Bitcoin “isn’t broken” if it is holding at this level. He states that the investors fear that if Bitcoin falls back to $6000 then they would never get out of the bears market.
Tom further states that Bitcoin is much bigger and a “show me token” right now. He said that Bitcoin is dependant on the new fiat inflows and whether the Asian and the traditional investors want to buy the cryptocurrency.
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