The price of Bitcoin has fallen to $8,150 from $8,300. The effect is that the coin market capitalization has dropped to $295 billion from $300 billion. A few coins such as Aelf (ELF), Holo (HOT), Zilliqa (ZIL), Binance Coin (BNB), and 0x (ZRX) which performed well against both bitcoin and the U.S. dollar last week dropped in value with some losing as much as 10 percent. The cumulative effect was felt instantly by the coin market.
The effect of Bitcoin on the coin market is such that its valuation is a critical determinant on the overall health of the market. Its dominance index is an indication of its market share or percentage of bitcoin that constitute the total coins in circulation.
At present, the Bitcoin Dominance Index stands at 47.5 percent, figures last seen in early January when the price of Bitcoin was $19,500 more than twice its present value.
Last week, as Bitcoin peaked at $8,300, its volume also peaked at $5.5 billion. There has been a significant drop in volume to $4 billion presently having shed $1.5 billion. Bitcoin trading currently at $8,150 is struggling to initiate the upward push that saw the coin rise to $8,300, a price it maintained for six days aside a brief period it fell by 6 percent on July 27.
The volume remains strong at $4 billion, which can be seen from the weekly candle of the coin which closed as a buy candle on Monday, a demonstration of a mid-term investment opportunity. In effect, it is likely that the price of Bitcoin will rise over the next couple of weeks.
It is worthy of note however that the coin needs to continually maintain its volume at $4 billion if the market is to continue holding above $8,000. A drop below the $4 billion volume will cause the price to slip to the $8000 support level. It is expected to have a recovery of $8,500 over the next few weeks.
Despite the strength of Bitcoin market over the past week, altcoins have not shown appreciable boost in value at the same period. This weakness will become more apparent if Bitcoin falls below the $8,100 mark over the next few hours as there is a keen interest in price movement.
Even a slight negative price movement against the dollar will cause the altcoin market situation to worsen.
It is interesting to note that not even Ethereum, the second most capitalized coin has been able to take advantage of the Bitcoin rally.
Altcoins like ICON (ICX), ZRX, ELF, BNB, and ZIL which have had strong growth at the beginning of the year and were expected to have kept up momentum all lost up to 70 percent value to Bitcoin and 90 percent to the dollar.
Although there are indications that the SEC ETF announcement may have caused the July 27 dip, a recent TAAB Group report says otherwise.
“Just read an estimate from the TABB Group (in a $5,000 report) that OTC crypto markets exceed exchange volumes by 2-3x. That would mean 1-1.5MM BTC is traded OTC daily. Strange it’s not visible on the blockchain, which shows a meager 100k/day.”
This was reported by Eric Wall, a cryptocurrency researcher.