- Bitcoin’s dominance on US stock exchanges rose to 71%.
- Overall activity on Bitcoin fell despite the price increase.
In the wake of Bitcoin’s rise above the $26,000 threshold, the crypto market was infused with renewed bullish sentiment.
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High on dominance
In addition, Bitcoin [BTC] The dominance on the American stock exchanges experienced a substantial revival. According to Kaiko data, dominance reached 71% last month, the highest level since October 2022.
The increase easily surpassed the previous peak of 66% seen during the US banking turmoil in March. This resurgence in dominance signals a potential influx of institutional traders into Bitcoin, potentially influenced by rising real yields and deteriorating global risk sentiment.
Source: Kaiko
Towards the end of September, Bitcoin’s cumulative volume delta (CVD) shifted into positive territory, indicating a net buying trend.
This increased buying pressure may help explain why Bitcoin largely maintained its price range even after a brief dip below $25,000 in early September following FTX’s announcement to offload its $3.4 billion crypto holdings as part of bankruptcy proceedings.
However, the recent capital injection into altcoin markets ahead of the expected launch of nine Ethereum ETFs in the US could temporarily disrupt this trend.
Source: Kaiko
Looking to the past
Historical data from Kaiko also showed that September is traditionally a challenging month for both conventional stocks and cryptocurrencies, with Bitcoin posting negative returns in 8 of the past 12 years.
Despite modest trading volumes and rising risk-free interest rates, BTC posted one of its strongest monthly performances in September, closing last month with a 4.7% gain.
On the contrary, QCP Capital, a crypto asset trading firm, expressed skepticism about the sustainability of the recent price increase. They stated that Bitcoin could test the critical support level at $25,000 in the last quarter of 2023.
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Factors contributing to this outlook include the potential diversion of demand from the spot market due to approved Ethereum futures ETFs and lower-than-expected core PCE inflation.
According to the most recent data available, Bitcoin was trading at $27,000. Despite the rising price, the number of daily active addresses on the Bitcoin network saw a significant decline, raising questions about the underlying dynamics of the market.
Source: Santiment