Bitcoin is correcting, and the market sentiment has noticeably declined. Many people have shifted their focus to altcoins, believing#山寨季 may be coming, and it combined with#比特币市占率 the phenomenon of recent declines to provide evidence.
There are a few key points I want to discuss with everyone: first, the short-term decline in market share should not affect the overall upward trend. Second, whether the indicator of Bitcoin's market share is still valid.
From a trend perspective, since around September 2022, Bitcoin's market share has been on an overall upward trend. According to Coinmarketcap data, Bitcoin's market share recently approached 58%, rising over 8% for the year, reaching the highest point since April 2021. Overall, Bitcoin's market share remains in a bullish trend, even with a recent decline, which has not formed a bearish trend.
The key to the second point lies in support#比特币市占率 Whether the underlying logic is effectively challenged, we know: according to historical data and past experiences, the early stages of a bull market are usually accompanied by an increase in Bitcoin's market share, while when the market enters altcoins, Bitcoin's market share tends to decline. When Bitcoin's market share reaches its peak, the market often enters a phase of sideways consolidation or correction. In principle, this is the result of Bitcoin attracting a large inflow of funds, leading to a higher price level, after which many profit-takers begin to realize profits, resulting in capital flowing into other coins.
The current influence on the foundation of the underlying logic is whether the funds flowing into the Bitcoin market can still spill over to other coins to support the rise of the altcoin season? The answer is actually obvious: it depends on whether the funds driving Bitcoin's rise come from the traditional crypto market or U.S. institutions?
In fact, the recent rise in Bitcoin's market share is mainly driven by the large-scale inflow of funds into Bitcoin spot ETFs, especially the participation of institutional investors. According to data disclosed by CryptoQuant CEO Ki Young Ju, institutional holdings in U.S. Bitcoin spot ETFs account for about 20%. Asset management companies hold approximately 193,000 Bitcoins. Thanks to the spot ETF, 1,179 institutions have joined in investing in Bitcoin this year.
From the data, from October 14 to October 21, #Bitcoin Spot ETF saw a continuous net inflow for 7 days, especially BlackRock ETF IBIT with a net inflow exceeding $1.5 billion, raising its current BTC holdings to 391,484 (valued at approximately $26.45 billion). Bitcoin's price also rose from $62,300 to over $69,000.
Therefore, we know that a large portion of the funds will increasingly come from U.S. institutions, while the proportion of funds from the traditional crypto market will likely decrease. Consequently, the trends and movements influenced by traditional crypto market funds will be short-lived, unable to form a grand bull market like before. Following traditional funds to achieve profit becomes very difficult, as it is inherently challenging to form a trend. Therefore, the effectiveness of the Bitcoin market share indicator in guiding our trading is also weakening, and we need to pay more attention to the situation in the U.S. market to capture the real trends! I wish everyone can become 'pigs on the wind' haha!