Bitcoin continues its slide, dropping 13% on average, but this is still a lot more than last week. There have been several migration patterns observed by crypto investors looking for the safest haven. First, investors fled to stablecoins as a way of avoiding the ever-present losses. The tide is now turning as bitcoin has become the dominant cryptocurrency.
Bitcoin Re-Establishes Dominance
Although all cryptocurrency markets have suffered from the drop, data suggests that some have experienced more severe losses than others. The highest losses have been recorded by Altcoins (especially those with small caps) as predicted. Bitcoin, however, is not exempted.
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Although the largest cryptocurrency in terms of market capital is down 13%, this hasn’t stopped it from returning to its market dominance and touching a new six month high. It is now at a 44.4% dominance and it hasn’t been this high since October of 2021.
Source: Arcane Research| Source: Arcane Research
Investors are increasingly turning to bitcoin because of the declining investor sentiment. Investors look to BTC because they consider it safer than other smaller-cap coins. Altcoins are being hammered on the market.
This has led to money being transferred from altcoins into bitcoin and leaving altcoins behind. The bitcoin index has seen the least decline among all of the indexes, with a mere 23% decrease since May.
Some other indicators have experienced higher losses. Large Cap Index suffered a 28% decline in the past two weeks. Mid Cap Index was down 31%, and Small Cap Index saw a 37% drop.
Stablecoins Make A Huge Hit
Although the UST mess has now been resolved, the effects of the third largest stablecoin’s crash continue to impact its counterpart. Some of this low sentiment flowed into USDT, the biggest stablecoin that had suffered a 10% drop in market cap, after the UST De-Pegging.
Source: MarketCap BTC Dominance via TradingView.com| Source: Market Cap BTC Dominance on TradingView.com
One of the reasons for this though had also been the peg of the stablecoin being challenged as bitcoin’s price declined. There is speculation that USDT funds may have flowed to USDC which happens be the second-largest stabilitycoin.
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These stablecoins both have maintained their dollar pegs though. UST was the only stablecoin without a dollar peg.
Featured Image from Yahoo Finance. Charts from Arcane Research and TradingView.com.