Bitcoin Market Update: Dominance Hits Three-Year High, Price Ends Week in Red, US Inflation Data Surpasses Expectations
Bitcoin Dominance Hits Highest Level Since April 2021 Despite Market Volatility
Bitcoin has shown remarkable resilience in the face of recent market volatility, with its dominance metric reaching 55.3%, the highest level since April 2021. According to Matteo Greco, a research analyst at Fineqia International, Bitcoin’s market cap dominance has hit a three-year high, defying recent sell-offs and maintaining robust trading volumes.
BTC Spot ETFs recorded a weekly trading volume of $16.2 billion, with an average daily volume of $3.2 billion. Since its inception, the cumulative trading volume stands at approximately $212 billion, with an average daily volume of $3.3 billion.
Despite ending the week at around $65,650, experiencing a 5.3% decline from the previous week’s closing value, Bitcoin faced notable volatility throughout the week. The weekend saw a dip in price attributed to geopolitical tensions in the Middle East, but market sentiment improved following an announcement of a temporary halt in hostilities.
The upcoming halving event scheduled for April 19th and 20th has also drawn attention, with historical trends suggesting potential upward momentum in the months following the event. However, short-term bearish sentiment was evident in the net outflow of $85 million from Bitcoin Spot ETFs during the week, as investors engaged in profit-taking following strong uptrends in previous quarters.
On the macroeconomic front, recent US inflation data surpassing expectations has led to a revision in rate cut projections for 2024. Market participants now anticipate 25/50 basis points cuts during the year, with the first cut expected in Q3. Greco noted that prolonged inflation levels could result in tighter monetary policy, impacting risk-on assets as investors realign their portfolios based on revised mid-term expectations.
Overall, Bitcoin’s resilience and dominance in the digital assets market highlight its value proposition amid market uncertainties and macroeconomic challenges. Investors continue to monitor key events and indicators to navigate the evolving landscape of cryptocurrencies and traditional financial markets.
