- Bitcoin dominance rising, clocks in over 51% despite 95% of BTC supply being stationary in past month
- Bitcoin dominance has been on a steady rise since late August, with October recording a commendable 51.25% rise.
- The last time BTC dominance tested this level was on July 13 when the market started craving new capital inflows.
- Meanwhile, data shows almost 95% of Bitcoin supply remains stationary in the past month, marking a new all-time high.
Bitcoin (BTC) dominance continues to stand, recording multimonth highs. Meanwhile, investors have chosen to leave their BTC holdings be, neither succumbing to selling appetite nor cashing in for quick gains.
Also Read: Bitcoin price faces rejection at $28,485 hurdle and looks ready to slide lower.
Open Interest, funding rate FAQs
How does Open Interest affect cryptocurrency prices?
Higher Open Interest is associated with higher liquidity and new capital inflow to the market. This is considered the equivalent of increase in efficiency and the ongoing trend continues. When Open Interest decreases, it is considered a sign of liquidation in the market, investors are leaving and the overall demand for an asset is on a decline, fueling a bearish sentiment among investors.
How does Funding rate affect cryptocurrency prices?
Funding fees bridge the difference between spot prices and prices of futures contracts of an asset by increasing liquidation risks faced by traders. A consistently high and positive funding rate implies there is a bullish sentiment among market participants and there is an expectation of a price hike. A consistently negative funding rate for an asset implies a bearish sentiment, indicating that traders expect the cryptocurrency’s price to fall and a bearish trend reversal is likely to occur.
Bitcoin dominance rises despite stationary BTC
Bitcoin dominance is rising, recording up to 51.25% as of the time of this writing, as indicated in the chart below from TradingView. The rise has been steady, particularly in October, with a sustained record of higher highs and higher lows. Notably, the last time BTC dominance was this high was around July 13, around the time when analysts were calling for more capital inflows. This makes the current reading more of a watershed momentum for BTC holders as it is a three-month high.
Based on the Relative Strength Index (RSI), momentum remains strong – if overbought – with the histogram bars of the Awesome Oscillator (AO) also bolstering this stance. A move back down out of the overbought zone on RSI, however, could signal another pullback.
BTC dominance
Skew, a renowned trader, has attributed the newly found gusto for Bitcoin to increased market de-risking into the $27,400 to $27,300 zone.
$BTC CVDs & Delta
— Skew Δ (@52kskew) October 9, 2023
Overall there's been a lot of market de-risking into $27.4K - $27.3K
important area now because losing that level would take prices back to 1W demand
more importantly, around here into tomorrow buyers need to establish price control for a move higher pic.twitter.com/t2Ijtsep2t
Meanwhile, recent data shows that almost 85% of Bitcoin supply remains stationary over the last month. This is a new all-time high and points to holders playing the long game as opposed to giving in to their risk appetites.
JUST IN: 94.8% of the #Bitcoin supply has not moved in the past month, a NEW ALL TIME HIGH pic.twitter.com/bNa4MdFbKW
— Bitcoin Magazine (@BitcoinMagazine) October 10, 2023
It also indicates that BTC has a strong community who are realizing the value of BTC for the future – that is, confidence in its long-term potential for realizing its value. With investors holding tight, Bitcoin price has a chance to recover and is likely to overpower the selling pressure.
Investors could be flocking to the world's largest cryptocurrency during times of uncertainty and moving away from riskier altcoins. Using Bitcoin as a safe haven much like Gold.
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