The price of Bitcoin is increasing as its dominance over cryptos increases. It’s a bad sign.

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Bitcoin and other cryptocurrencies rose on Tuesday with the biggest digital asset dominating at all-time highs, which doesn’t bode well for sentiment in the crypto landscape.

The price of Bitcoin has risen more than 1% in the past 24 hours to $26,750, at the upper end of a trading range between $26,000 and $27,000 that has been holding since a high. 10 months above $30,000 was reached in Aprila level which proved difficult to Claim. Cryptos have continued to stagnate in fork-bound exchanges despite major regulatory and economic catalysts.

Short-term indicators are pointing up, though medium-term indicators are pointing down, so we remain short-term neutral for now, said Katie Stockton, managing partner at technical research firm Fairlead Strategies. A breakout, although unlikely in the short term, would target a second resistance near $32,000.

Bitcoin, much like the Dow Jones Industrial Average and the S&P 500, will likely react to congressional testimony on Wednesday and Thursday from Federal Reserve Chairman Jerome Powell. After the Fed held interest rates steady last week, the first time in this tightening cycle that has wreaked havoc on risk-sensitive assets like cryptos, investors will focus on Powell’s tone and s he telegraphs that more rate hikes are coming.

But there are also important trends within crypto itself. Bitcoin’s dominance over the rest of crypto, a measure of Bitcoin’s market capitalization as a percentage of the total digital asset market, recently hit its highest level in more than two years.

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Bitcoin dominance stood at 48.5% on Tuesday, according to CoinMarketCap, with some market watchers noting a brief spike above 50%. Either way, it represents the highest levels since May 2021 and goes with declines across the altcoin or smaller token space amid regulatory pressures in the US. While this is a sign of traders’ confidence in Bitcoin, considered a safe-haven asset within crypto, it does represent a weakening in sentiment. on the whole market.

Bitcoin’s dominance increases when investors do not feel confident about the short-term market trend and adjust their position towards a less speculative portfolio, increasing their exposure to Bitcoin, which is generally known to be the least popular digital asset. volatile, said Matteo Greco, an analyst at digital asset group Fineqia International.

Beyond Bitcoin, Ether, the second largest crypto, gained 1% to $1,725. Altcoins were more mixed, with Cardano down less than 1% and Polygon up 1%. Memecoins were more subdued, with Dogecoin and Shiba Inu both losing 1%.

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Write to Jack Denton at [email protected]

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