The rally in alts has reduced inflows into BTC, with headline-grabbing moves driving retail investors into the fast money options, such as Doge. This trend will continue until we see a sharp fall in prices, at which point, we will see a rotation from alts back into Bitcoin. With the dominance index holding below 50%, it's clear that Bitcoin is no longer flavor of the month, for now at least.
Taking a step back, the rise in alternative coins is raising the profile of crypto at pace. A broader diversification of portfolios is leading to a net increase in the total capital deployed in to the space.
Bitcoin is still the bellwether, and the warning signs are there to see. The next week is going to be a telling point in the 2021 crypto story. Should BTC sneeze, and take another ride to $50,000, the rest of the market is at risk of catching a cold.
If Bitcoin can climb and consolidate above $56,600, then the bull run in both BTC and alts will run on.
$56,600 turned from support to resistance in early trade, with the Bitcoin bulls unable to drive prices back above the key level. Bitcoin headed south, with support at $54,200 quickly challenged and broken. A brief dip towards $53,130 was countered and defend by the bulls.
Bitcoin must close above $54,200 this evening or face increased selling pressure as the bears push for another test of $53,130 and look for auto-liquidations to kick in and take BTC down to $50,000.
A close above $54,4200 will allow the market to walk back up to $56,600 and continue to form the new trading range.
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With investors looking at the next Fed monetary policy meeting, equity indexes rose yesterday. The S&P reached new records while the Nasdaq closed within 20bps of the all-time high.
Welcome to the Weekender: Your weekly round up of the most viewed stories of the week, as voted by you, our readers. This week has seen the negative news flow replaced with tales of adoption, it appears the central bankers, country leaders, and the financial institutions have all agreed: Digital finance is here to stay.
Yesterday, the US reported CPI data—an index calculating the price increase or decrease of a basket of goods. The number is higher than expected and indicates inflation is picking up.