Bitcoin has corrected, and the market sentiment has noticeably dropped. Many people have shifted their focus to altcoins, believing#山寨季 may be coming, and combined with#比特币市占率 the current phenomenon of decline, providing proof.
There are a few key points I want to discuss. First, the short-term decline in market share cannot affect the overall upward trend. Second, whether the Bitcoin market share indicator 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, BTC's market share has recently approached 58%, increasing over 8% for the year, reaching a high not seen since April 2021. Overall, Bitcoin's market share remains in a bullish trend, even though there has been a recent decline, thus the decline has not formed a trend.
The key point of the second point is support#比特币市占率 The underlying logic being effectively challenged, we know: Historically and based on past experiences, the early stages of a bull market cycle are usually accompanied by an increase in Bitcoin's market share, while during the transition to altcoins, Bitcoin's market share typically declines. When Bitcoin's market share reaches a peak, the market often enters a consolidation or correction phase. The principle is that after attracting a large inflow of funds, Bitcoin's price reaches a high level, leading many profit-takers to cash out, resulting in funds flowing into other cryptocurrencies.
What currently affects the foundation of the underlying logic is whether the funds flowing into the Bitcoin market can still overflow into other cryptocurrencies to support the rise of 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 rise in Bitcoin's market share in this round is mainly driven by the large-scale inflow of funds into Bitcoin spot ETFs, especially with 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 firms hold approximately 193,000 Bitcoins. Thanks to spot ETFs, 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 with BlackRock's ETF IBIT having a net inflow exceeding $1.5 billion, increasing its current BTC holdings to 391,484 (worth about $26.45 billion). Bitcoin's price also rose from $62,300 to over $69,000.
Therefore, we know that the major source of funds will increasingly be U.S. institutions, and the proportion of funds from the traditional crypto market will likely decrease. Thus, 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 quite difficult because they themselves struggle to form trends. Therefore, the effectiveness of the Bitcoin market share indicator in guiding our trading is also weakening. We need to pay more attention to the situation in the U.S. market to capture the real trend! I wish everyone can become 'the pig on the wind vent,' haha!