05 Aug 2024 Jane Whitmoore
Massive Sell-Off In The Crypto Sector Pushes Bitcoin’s Dominance To 58%
Amidst a notable decline in the cryptocurrency and stock markets, Bitcoin dominance, or the percentage of its market value to the whole crypto market, reached a new yearly high of 58%.
Source: TradingView
In the early hours of August 5, during a rapid sell-off that saw Ether (ETH) drop as much as 18% in two hours and BTC drop 10%, the dominance of Bitcoin (BTC) temporarily reached 58.1%.
According to IG Markets analyst Tony Sycamore, the rapid fall acts as a sharp warning that Bitcoin and other crypto assets are currently sitting at the “pointy end” of the risk asset range.
“It’s a position wash with some recession and hard-landing fears driving it and some war fears as well given the fact that Israel and Hezbollah have been exchanging rockets over the weekend, and the US is ramping up that military presence in the area,” Sycamore further explained.
According to the market analyst, the larger carnage taking place in Asian markets—which included a staggering 8% daily decline in Japan's Nikkei 225 and trade halts in South Korea—was a direct consequence of a broader sell-off in the global stock markets.
Furthermore, Sycamore made the clarification that the vast majority of currencies and ecosystems constructed on top of the network are among the reasons Ether's price movement had been acting accordingly to the broader trend.
"When altcoins get poleaxed it blows through into Ether's price action as well," Sycamore added, pointing out notable unwinding and sell pressure from cryptocurrency trading company Jump Crypto.
Data from CoinGecko further revealed that the price of Ether has decreased by 30% over the past seven days, while the prices of other popular altcoins, such as SOL, BNB, and XRP, have decreased by 35%, 25%, and 21%, respectively.
In the future, Sycamore pointed out that the Institute of Supply Management's (ISM) Manufacturing Purchasing Managers Index report, which is set to be released soon, may provide insight into the direction the market is going in the future.
"I believe the ISM number has the power to defuse or heighten anxiety because, should the labor market suddenly contract, it would indicate that the Fed has missed its window, which would likely result in additional declines for all risk assets, including cryptocurrency." the market analyst explained.
According to Sycamore, if the ISM data enters "expansionary territory," it may indicate that the market is more robust than anticipated, providing a stable foundation for the risky asset price.
Up to $500 billion has been taken out of the overall market value of cryptocurrencies in the last 72 hours, marking the biggest three-day sell-off since August 2023. Currently, Bitcoin’s dominance sits at 56,96% of the total market capitalization of $1,88 trillion.
