Altcoin Aversion: Why Bitcoin And Stablecoin Dominance Is On The Rise

Reynaldo Marquez

Last Updated: June 11, 2024 11:33 am

2 mins read

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Bitcoin and the crypto market are back in the red. The first crypto by market cap records a 2% loss in the last 24-hours and could push other digital assets into critical support zones.

At the time of writing, Bitcoin is one of the best-performing assets in this ranking only surpassed by Binance Coin (BNB) and Ethereum (ETH), according to data from Coingecko. BTC’s price trades at $37,600 with a 7% loss over the past week.

Bitcoin BTC BTCUSD — BTC moving sideways on the 4-hour chart. Source: BTCUSD Tradingview

After a major outage to its network, Solana (SOL) records a 16% loss and stands as the worst-performing cryptocurrency by market cap. Terra’s native cryptocurrency LUNA closely follows with a 15.5%.

These losses seem small when compared to other cryptocurrencies in the top 100 by market cap. Tokens that were higher in the ranking, like Shiba Inu (SHIB) and Avalanche (AVAX), now record as much as 20% losses in one week alone.

According to a recent report from Arcane Research, smaller cryptocurrencies have been underperforming in the current market conditions. Investors seem to be fleeting to “safety” as the appetite for risk decreases pending a potential 50 basis point increase from the U.S. Federal Reserve (FED).

While Bitcoin and larger cryptocurrencies have been showing a correlation with a 16% loss for April, Arcane Research’s small-cap index and mid-cap index are trending lower. The former record a 30% loss while the latter records a 29% loss over the same period.

Conversely, Bitcoin’s dominance has been moving opposite to small coins. This metric stands at 42% with a high probability of extending as macro-conditions continue to prove unfavorable. Arcane Research noted:

Stablecoins also see growing dominance. UST has entered the top 10, becoming the first algorithmic stablecoin to achieve this. We now have three stablecoins among the top 10, and 4 among the top 11, illustrating the current flight to safety tendencies in the market.

What To Expect From Bitcoin In The Short Term?

A separate report from FTX Access claims the market is pricing 50 bps hikes for the upcoming four FED meetings. This would place interest rates at around 2 or 2.5 bps for the end of 2022.

In that sense, FTX Access claims that unless there is a surprise from the financial institution, the market could see some relief:

Powell’s tone will be interesting but without raising +75bps or increasing the pace of QT it’s a high bar for a hawkish surprise. Some of this is cause for optimism, but unfortunately sentiment is rock bottom.

Reynaldo Marquez

A literature major, Reynaldo Márquez has been deeply immersed in the crypto industry since 2017. His journey began with translating articles for various crypto news outlets, a role he took on with zeal. In 2018, amidst a challenging market, he embraced his first writing assignment, demonstrating his unwavering commitment to the nascent industry and the promise of change it bears for many people worldwide.
In March 2021, he joined the prestigious crypto news outlet NewsBTC and Bitcoinist, where he not only reported on the latest crypto news but also had the privilege of interviewing some of the industry's most influential figures. A year later, his dedication and hard work were recognized, and he was promoted to Managing Editor, a position he currently holds with pride.
He believes in honesty, good communication, hard work, and the power of cryptocurrency and its potential to transform people's lives, especially those alienated by the legacy financial system. Born in 1992 in Venezuela, Reynaldo is familiar with how governments and central banks can negatively affect people, their everyday lives, and their futures by creating inflation and erasing their hopes for a better future. Thus, like many Venezuelans, he embraced this new technology to help him and his family navigate difficult times.
In another life, Reynaldo would have pursued a career as an investigator, most likely tracking down the origins of the Cyberpunk movement with the publication of William Gibson’s ‘Neuromancer.’ The intersection between fiction and reality, with the materialization of Bitcoin in 2009, would have allowed him to dive deep into the crypto sphere as something more than a financial phenomenon but also a cultural shift in society that was brewing since the XX century, and maybe even sooner, in the XIX century with the publication of Henry David Thoreau’s ‘Civil Disobedience.’
But that’s for another life. In this one, Reynaldo has been trading to improve his trading skills. Since 2023, he has been trying to learn Python to create successful strategies and find ways to execute them. It is a difficult task, which continues to keep him busy today and will most likely continue to keep him busy in the near and long term.
In his free time, he enjoys lifting heavy objects, reading, watching movies, and listening to his favorite music. Some of his favorite authors are Walt Whitman, William Faulkner, Allen Ginsberg, James Baldwin, Raymond Carver, Ray Bradbury, George Orwell, Mario Vargas Llosa, Reinaldo Arenas, Rafael Cadenas, and many others. Lately, he has been primarily interested in reading about dystopic societies, a topic that deeply resonates with the crypto industry.
Since 2023, he has lived in Spain with his wife. He loves the weather, the food, and the people and their culture. They both expect to travel much more within the country they now call home and beyond its border. He hopes to retire with his wife, maybe in a quiet place near a beach, but most likely in a city close to a library and a university with his kids and, hopefully, grandkids.

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