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Daily Bitcoin and Crypto Analysis

October 12 Daily Crypto Update: BTC And The BTC Dominance Continues Higher

October 12, 2021

Justin d'Anethan

Traditional markets are grappling with an upcoming earnings season and, it seems, somewhat tamer expectations.

Rising energy costs also weigh on production, which increases prices and impacts consumers’ savings and spending, which isn’t good. With all that in mind, investors sold equities yesterday, with the S&P retracing almost a full percent.

In the crypto space, BTC is moving up regardless. It’s just beautiful to see how we’ve shaken off the bearish comments on China’s ban or the El Salvador BTC implementation. Yesterday, prices rose a healthy 4.5%, currently hovering a bit above 57,000. We’re now just 10-12% away from the all-time high, and you can see Twitter fretting with new bullish year-end projections.

The more noticeable story for me, though, is the BTC dominance. It’s a habitual pattern in the crypto space: BTC leads the way and alts catch up later on, but, with so much going on in DeFi and NFTs, one could have thought, “this time is different.” And for now… it’s not. The BTC dominance is almost back to 46. That means alts are currently losing market shares.

While BTC rises, LINK, DOT, VET, XTZ are all down about 2%. Older proof of work coins seem to be doing ok with LTC, BCH, and ETH scrambling to gain 1% to 2%.

I suspect this won’t last forever, though. We’ve seen what happens when alts catch up and then outperform. I hold many of the more exotic alts because of the upside volatility and its explosiveness during rallies, which I can then cycle back into BTC, which remains my core allocation.

Because of the ETF talks that are driving sentiment right now, and the fact that they’ll be BTC-focused, BTC will continue to lead. And you can see institutional money flow in steadily. A great chart from CoinShares shows an eighth week of inflow into its crypto-linked products, and the pace is increasing.

Just yesterday, the SEC approved an ETF that is not invested in BTC but still groups companies with exposure to Bitcoin. Not really what the main market is hoping for, but it shows openness from the regulators.

By the way, on an unrelated note (or maybe not), did you see the long-term holder’s supply reaching new highs? This could be seen as a negative, but it could also mean that the perspective has changed to very strong hands looking for more upside. Let’s see.

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