Monat: April 2023

• Bitcoin moves the cryptocurrency market 
• Its dependency on the US dollar increased 
• Bitcoin holders better believe that the US dollar is in a bearish market

Investing in the cryptocurrency market is not for everyone. Volatility, for example, is much higher than in other markets. 

Sometimes, for no apparent reason, the prices of various cryptocurrencies bounce or decline aggressively, leading to speculation that the market is rigged. Lack of regulation might explain the moves, but surely investors wonder what moves the cryptocurrency market. 

The one and the only answer is Bitcoin. Its share of the total cryptocurrency market capitalization nears 50%. 

In other words, if Bitcoin’s price is rising, Ethereum or other cryptocurrencies can’t decline. And the other way around is true – if Bitcoin enters a bearish market, the other cryptocurrencies will follow. 

Therefore, the right question is not what moves the cryptocurrency market but what moves Bitcoin? 

Lately, Bitcoin moves following developments in the traditional currency market. More precisely, it follows the dollar. 

Bitcoin chart by TradingView

Bitcoin follows the dollar’s strength or weakness

The chart above shows Bitcoin’s performance from late 2021 to the present. Above, in orange, is the dollar index (DXY). 

It shows clearly that during the bear market of 2022, Bitcoin declined while the dollar strengthened. EUR/USD dropped below parity in 2022, trading as low as 0.96 at one point. The euro is the main component of the DXY, and thus the EUR/USD currency pair is the relevant one to consider. 

Bitcoin dropped, too, trading well below $20k. 

But then, in October 2022, the dollar bottomed. EUR/USD bounced above parity and rallied into the year’s end. 

It took Bitcoin until the end of the year to catch up with the dollar’s weakness. Eventually, it bounced too, rallying in 2023 and gaining over 75% in four months. 

To sum up, Bitcoin holders better believe that the US dollar will weaken lies ahead. Otherwise, it is difficult to hold Bitcoin if the dollar enters a bull market. 

The post What moves the cryptocurrency market? appeared first on CoinJournal.

• Bitcoin makes up about 48% of the total cryptocurrency market capitalization
• The share rises to 75% if we include Ethereum and Tether
• Other cryptocurrencies’ share declined despite the latest cryptocurrency market rally

The cryptocurrency market bounced in 2023 and rallied right from the start of the trading year. As a result, Bitcoin is up +77.60% YTD, a remarkable performance in just four months. 

Other cryptocurrencies took the lead from Bitcoin. As such, the entire market bounced, as reflected by the total crypto market capitalization. By the end of 2022, it dropped to $755 billion following a bearish market but now reached $1.16 trillion. 

It means that investors regain confidence in the crypto space after the FTX scandal and other frauds. 

But besides Bitcoin, what other cryptocurrencies are favored by investors? Two stand out of the crowd: Ethereum and Tether. 

Ethereum and Tether keep pace with Bitcoin

The chart above shows the total crypto market capitalization dominance in percentages. Unsurprisingly, Bitcoin leads with 48.58%. 

Its share rose from 40% at the end of 2023, in the detriment of other cryptocurrencies, such as USD Coin or Solana. Even Binance Coin lost share, sitting at 4.31% currently. 

The chart shows that only two cryptocurrencies keep pace with Bitcoin – Ethereum and Tether. Ethereum’s share remained stable even during the bearish market of 2022. The same with Tether. 

The three comprise about 75% of the total cryptocurrency market capitalization – a good statistic to consider next time when investing in cryptocurrency. 

The post Ethereum and Tether – the only cryptocurrencies keeping pace with Bitcoin appeared first on CoinJournal.