Bitcoin (BTC) has gained momentum, gaining more than 6% in the last 24 hours. The focus on the market as of now is whether Bitcoin (BTC) can sustain its current rally, given that it has been holding around $30,000 for over a month.
The total value of the cryptocurrency market is $1.29 trillion, while the market cap of Bitcoin (BTC) is $599.2 billion. While Bitcoin (BTC) was rising, altcoins started to move. After the Terra crisis, many altcoins were hit hard. With the market experiencing drastic corrections, Bitcoin (BTC) dominance reached levels last seen in July 2021. According to experts, the current dominance level of BTC could indicate that a strong rally is on the horizon.
As seen in July, high Bitcoin (BTC) dominance often precedes a strong rally. This can be clearly observed in October 2021, when the market soared to record highs after Bitcoin (BTC) dominance reached around 47%. High Bitcoin (BTC) dominance usually indicates that the altcoin market is undervalued and attracts investors. The buying pressure in the market then gives momentum to the BTC price. However, the macroeconomic environment is different now than it was in 2021. The Federal Reserve began to reduce liquidity in the market. This was a major factor in the rally seen in the market over the past two years. Quantitative tightening of the Fed may prevent the price increase in Bitcoin.
Analyst Miles Deutscher said on Twitter: "Bitcoin dominance is rising. This indicates that the rally is likely to continue. The macroeconomic environment remains largely bearish, but there is a strong possibility that we will rally in the short term."
According to leading analysts, Bitcoin (BTC) price action is largely dependent on the Fed's rate decisions. However, in the long term, the optimism in the market remains.