According to data from Fairlead Strategies, Bitcoin’s dominance has risen to a key level, signaling further upside.
* Bitcoin is about to end its seven-month winning streak due to a number of factors, including slowing demand for spot ETFs.
* According to Fairlead Strategies, Bitcoin’s dominance has risen to a critical level, signaling further upside.
Bitcoin (BTC) appears poised to end its seven-month winning streak. Still, the largest coin by market cap could see a dominance in the crypto market, according to one analyst.
As of writing, Bitcoin is changing hands at $63,200, marking a monthly loss of 11%, its first since August 2023, according to data sources CoinDesk and TradingView.
A combination of factors, including a reduced likelihood of a rate cut by the Federal Reserve, reduced demand for U.S. spot Bitcoin exchange-traded funds (ETFs), and broad risk aversion in financial markets, have put an end to Bitcoin's bull run this month. Meanwhile, the continued expansion of well-known stablecoins is also a supporting factor.
Analysts are now closely watching the U.S. Treasury’s quarterly refund statement on Wednesday. Singapore-based QCP Capital said increased issuance of short-term bills could free up liquidity, supporting risk assets.
“The upcoming Quarterly Refund Announcement (QRA) on May 1 is also likely to lead to an increase in the issuance of short-term notes in the US. This will drain the current $400 billion of RRP and increase liquidity,” QCP said in a market note.
The U.S. Treasury Department said on Monday it plans to increase borrowing in the April-June quarter. Higher-than-expected borrowing means more bond supply, higher yields, or risk-free rates, and less reason to invest in risky assets.
The U.S. Treasury also said it expects the balance of its Treasury general account to remain at $850 billion by the end of September, slightly higher than the expected $750 billion.
BTC will become more dominant
Bitcoin’s dominance, or share of the crypto market, recently rose to a three-year high of 57%, breaking out from a six-month consolidation pattern.
The breakout means Bitcoin could continue to outperform alternative cryptocurrencies (altcoins) in the coming months.
“IT (dominance rate) has recently broken out in favor of Bitcoin over altcoins in the medium term, which is consistent with the weekly RRG (relative rotation chart) with most altcoins pointing lower,” Fairlead Strategies said in a note to clients on Monday.
“The breakout in the index signals a continuation of a long-term turnaround phase that has reversed much of the gains altcoins made in early 2021,” Fairlead Strategies added.
