Crypto Market Analysis: Bitcoin, Altcoins Remain Sluggish While Dominance Continues to Surge
The Bitcoin price continues to trade below $22,500 for the fourth consecutive day after the drastic price slash in the first few days of March. While Star Crypto is trying very hard to hold the price levels above the support zone, the bearish action also appears to be ineffective at the moment. Therefore, this has compelled the BTC price, along with the entire crypto space, to trade within narrow bands with slashed volatility.
As mentioned in the above chart, the BTC price in the short term has been trading within very narrow ranges. The Bollinger bands have been squeezed heavily and have maintained a parallel trend for more than a few days now. Hence, considering the volume, a notable price drop appears to be evident, as the bears have currently dominated the rally.
In the meantime, the dominance of Bitcoin and the popular stablecoin, USDT, is also surging notably. However, BTC dominance has some prerequisites for continued growth, like a surge beyond 44% that may only trigger an upswing towards the next levels above 46%. Otherwise, a substantial drop toward 42% could be imminent.
Besides, USDT dominance displays the possibilities of a bullish breakout and surge of more than 15% to 20% by the end of Q1 2023.
In the worst-case scenario, if the prices of the popular cryptos continue to slash and the dominance of USDT remains elevated, then a massive flow from Bitcoin and other altcoins to stablecoins is quite possible in the coming days. In such a case, the BTC price may even drop by as much as 25% to 50% by the end of March.
Collectively, the market sentiments for Bitcoin and other altcoins are bearish, but the future predictions remain bullish. Therefore, currently, when the markets are consolidated, a significant price drop may be expected that could attract new traders to get in before the beginning of the new bull run.