Crypto Crashes Ahead of Weekend After Good Run; BTC Dominance Shrinks
Bitcoin (BTC) sank to lows near $7,300, bringing the entire market down, but prospects of a continued rally in the long-term are still alive.
The rally of Bitcoin (BTC) and altcoins this week abruptly ended, as the leading coin crashed by hundreds of dollars within hours. BTC slid from the $8,000 tier, going down to $7,370.64 as of 5:20 UTC on Friday, on record selling volumes above $30 billion’s equivalent. Most altcoins that previously rallied lost more than 10% of their price in a day.
The past trading days were a mix of positive news and shakedowns, with some believing BTC was set to rally without obstructions, while others envisioned a correction. The Binance maintenance failed to bring down the prices, but the sudden closing of Cryptopia, without releasing traders’ funds, showed that the market was still risky.
Vinny Lingham, founder of Civic, commented on the correction as inevitable, but essentially seeing BTC’s trend as stronger than the temporary move:
The other potential reason for the speedy crash is margin trading on Bitmex, which exacerbated the price drop.
Another theory for the sudden drop in BTC is an attempt to abandon Tether (USDT). During the current sell-off, only 62% of volumes are tied to the USDT coin, as sellers are moving to the USD pair. Still, USDT is extremely influential, with volumes above $32 billion’s equivalent in 24 hours, and each coin traded more than 11 times in a day for an extreme turnover.
This time, however, the weakness in BTC coincides with an inflow of funds into Ethereum (ETH). The asset sees an inflow of USDT to the tune of $2.4 billion’s equivalent in a day, up from the usual levels of around $1 billion. Additionally, some of the BTC is sold off for ETH, up from about $1 billion in 24 hours to $1.9 billion this Friday. ETH remains the biggest winner in the past week, with expectations of more significant growth after a long price slide.
The most recent events show that nothing is guaranteed in the digital asset markets, and the recent BTC dominance is not set in stone, sinking within days from near 60% back down to around 56%.