Over the month of July Bitcoin saw spikes which seemed to jolt much needed confidence amongst many crypto investors and the cryptocurrency market in general. The digital assets market has suffered through much of 2022 for the most part, with April, May and June going from bad to worse for Bitcoin, altcoins and even crypto investment platforms.
Just over a month ago, on June 18, Bitcoin dropped to its most recent low of $17,542. From that price level, to its most recent high of just around $24,200, reached on Wednesday, July 20, the price of BTC is up almost 40% in just over a month. The most recent shift, just days ago, on Friday, July 20, BTC price dipped below $23,000 again, but several factors offer insight into what the next season could look like for Bitcoin and the greater globally traded cryptocurrency market.
What Bitcoin’s Price Movement May Suggest
While it is never a sure way to accurately predict the future price movement of any instrument traded within any regulated or unregulated financial market, many experts have recently weighed in on the potential future price movement of BTC. Just recently, Bitcoin dominance reached 44% for the first time since October of 2021.
What has been historically evident with greater Bitcoin dominance, is that when it strengthens against altcoins, it could indicate a future decline in crypto trading altogether. When more currency flows into altcoins, this typically indicates ‘altcoin season’, which has usually come in times when members of the public have greater accessibility to expendable capital. First Bitcoin pumps, and then what is often seen is, profits flow into smaller market capitalization cryptocurrencies.
Bitcoin Dominance And Other Indicators Could Mean A Coming Price Correction
BTC dominance represents the market capitalization of Bitcoin measured against altcoins. The available money supply and public confidence is almost unanimously agreed by seasoned crypto professionals, to affect future Bitcoin and greater crypto market conditions, just the same as the stock market and other publicly traded financial markets. Specifically, as fiat currency becomes more abundant and readily accessible to the general public, typically stocks and other financial markets, including crypto, can expect to see an increase in market participation not long after. Alternatively, when fiat currency is less available to the general public and significant levels of uncertainty exist in the global economy, less market participation, and a subsequent decrease in price action are often witnessed.
When such factors are taken into account, it could mean Bitcoin and altcoins are in for a correction despite the recent price elevations witnessed in July. This potential scenario of a BTC correction impending is supported by active elements such as current inflation rates, which are at their highest levels in decades, the largely underperforming stock market as of late, and the price of many goods, services and commodities, which are rising indefinitely.
It’s Hard To Tell What The Next Significant Price Movement Will Be For Bitcoin
While the recent surge of Bitcoin, and the number one altcoin by market capitalization, Ethereum, could be a mere isolated pump before a larger correction, some experts believe that BTC will continue its surge while reflecting common minor corrections along the way. Such experts substantiate this sentiment mainly with metrics such as stablecoin dominance, which is higher than normal, indicating investors could be either waiting to re-enter the cryptocurrency market at the right time, or staying on the sidelines prior to exiting the market for an extended period of time. Again, there is no way to know for sure, until the market unfolds.
What is certain is that Bitcoin, Ethereum and other digital currencies have experienced recent surges, and it has been good for many to see after May and June were riddled with challenges in the crypto industry. TerraLuna and its algorithmic stablecoin UST crashed alongside its native LUNA cryptocurrency coin and popular cryptocurrency networks and investment platforms like Celsius, Three Arrows Capital and Voyager closed and filed for bankruptcy, just to highlight a few. Significant levels of uncertainty also lie around future regulations as the SEC continues their battle with Ripple Labs, while also considering measures to take in order to establish regulatory clarity in the crypto space. Therefore, regardless of the fluctuations to come to BTC and altcoins in coming months, it has been nice for many to witness the upward market movement, and most expect to see more, either soon, or after the crypto winter which some experts believe to be setting in.