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New research suggests Bitcoin’s [BTC] cryptocurrency market dominance is more than 80 percent

Akash Anand

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Source: Pixabay

There have been many cases where Bitcoin’s dominance in the cryptocurrency market has been questioned. With the advent of the bear market, many in the cryptocurrency system have also commented that ‘Bitcoin is dead.’ According to recent research by John-Paul Thorbjornsen however, Bitcoin is still going strong with a market dominance of more than 80 percent. The researcher arrived on the figure by taking Bitcoin’s liquidity into account.

Source: Medium

According to the graph above, it is clear that Bitcoin is much more dominant than Ethereum and other coins, when it comes to liquidity. John Paul stated in his research,

“It is clear that Bitcoin is the dominant currency when taking liquidity into account. In terms of share, it is consistently over 80% and trending up. In fact, just taking into account the Top 5 coins, Bitcoin (the 20%) captures over 85% of the market — thus it is a Pareto distribution, and actually much stronger. This is only testament to how strong the Schelling Point around Bitcoin is.”

The research also claimed that CoinMarketCap’s market dominance charts are flawed because they do not factor in liquidity. John-Paul spoke about the incorrect ’55 percent dominance’ tag quoted by luminaries in the cryptoverse, including Ethereum’s Vitalik Buterin. The comment in question was,



“Bitcoin was for example the first cryptocurrency and originally…it had 100 percent of the market share. Then it went to 90 and now it is at 55.”

According to the research, the liquidity of Bitcoin had to be calculated as a metric and hence, it was deduced that they were supposed to be multiplied together to form another metric called Volume-Weighted Cap. This is the factor that suggests Bitcoin’s overwhelming dominance over other cryptocurrencies in the market.

While Bitcoin’s dominance in terms of market share was asserted, the cryptocurrency also received another good news this week when it was found that BTC’s hash rate had reached a 4 month high. Sources showed that the hash rate was clocked at 52 quintillion, while the last peak was in November 2018 when the hash rate recorded was 54 quintillion. The highest Bitcoin hash rate ever recorded was in August 2018, when it spiked to a record 62 quintillion.





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Bitcoin

Bitcoin [BTC] surges above $5,500 and breaks major resistance level; collective market rises

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Bitcoin [BTC] surges above $5,500 breaking major resistance level; collective market surges
Source: Pixabay

Bitcoin [BTC] broke out of its sideways trend that saw coins fall after a brilliant start to April. This “break-out” is especially significant since it came days after the coin was trading sluggishly, pulling the market cap below $175 billion.

After breaking the $5,200 level on April 16, the coin held steady, showing no noticeable dips. However, it also began losing the momentum it had gained when it rose by 15 percent on April 2. Many saw the past week as Bitcoin losing steam, opining that a drop to as low as $4,000 would manifest. This pessimism coupled with the delisting dilemma saw the global market decline by 3.31 percent over the past weekend.

Given this backdrop, the present Bitcoin price incline was even more bullish for the collective market. Further, this was not just an effort to shrug off “sideways bears,” but instead, two key levels were broken in order to usher a collective market rise and sustain BTC bullishness.

Source: Trading View

RESISTANCE

The first, as indicated by eToro’s senior market analyst Mati Greenspan, was the resistance level of $5,350. When Bitcoin began to consolidate following the early April high, Greenspan stated that if the BTC price were to punch above the aforementioned level, it “would likely serve as confirmation that we’re pushing higher and will lead to further buying pressure.”

Greenspan stated that the $5,350 level acted as a major support level throughout 2018. Hence, it is incredibly important that Bitcoin surge above it in the next rise to consolidate buying pressure. Another important point to signal the coming of a bullish market was the 200-day moving average which Bitcoin has stayed above since the April 2 rally.

PSYCHOLOGY

The other significant level for the collective market is Bitcoin’s ascendance over $5,500, which it managed courtesy of this rally. Many, including Greenspan, pegged $5,000 as a key psychological level for the coin and hence, the rise above $5,500 less than three weeks after $5,000 was broken will bring back optimism to the BTC market.



Further, as was seen in the April 2 rise, the Bitcoin pump resulted in the king coin increasing its market dominance. At the close of March, Bitcoin was edging closer to losing the majority. However, the rally saw its share increase to 52.4 percent within a day. Following this recent 4.61 percent increase against the US Dollar, the king coin’s dominance increased to 53.2 percent.

Given the elasticity of the collective market to changes in Bitcoin’s price, the market was awash in green as Bitcoin broke the resistance and psychological levels. Amid this bullish charge, some coins stood out for their above-average gains, which included Bitcoin Cash [BCH], Cardano [ADA], EOS [EOS], Litecoin [LTC], and the exchange-ousted Bitcoin SV [BSV].





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