Bitcoin lags recent US stocks and altcoins: a new analysis

Bitcoin’s dominance has deteriorated. The number one cryptocurrency behind altcoins in terms of market capitalization. The metric, which measures the BTC percentage of the crypto market cap, has a higher trend, but it seems to be changing direction and may indicate further losses.

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Bitcoin facing additional losses?

According to a report by Arcane Research, Bitcoin has been trading on the other side in the $ 21,000 area for the past week, gaining 3%. At the time of writing, the price of BTC is trading at $ 20,300 and may be about to retry previous levels of support.

In the same period, according to Arcane Research, Ethereum (ETH) and Binance Coin (BNB) gained at least 10%. This is the first week in the lock for ETH prices since the huge sales pressure across the sector began on March 28th.

Meanwhile, while BTC price is bound to range, US stocks have seen some gains. The S&P 500 and Nasdaq 100 Index are up as high as 6% over the past week. Stock prices are starting to fall and may indicate further losses in the crypto market.

Arcane Research writes the following about the factors that influence the development of BTC prices:

“The relative underperformance of Bitcoin against ordinary shares and altcoins in this highly correlated environment is probably due to the increased infection around the UST and 3AC (…) fall.”

The impact of these events creates major problems for centralized credit institutions. Many are forced sellers in liquidating assets to meet outstanding debt obligations. Arcane Research on this:

“The market is paying close attention to how the current imbalances are being resolved, enabling BTC to recover significantly.”

Why Bitcoin could outperform stocks

Bitcoin has evolved into a lockstep with traditional stocks. But the cryptocurrency could overtake them in the second half of 2022.

The downturn was mainly driven by the above factors and the change in monetary policy from the US Federal Reserve (Fed).

The financial institution seeks to curb inflation by raising interest rates. As deflationary pressures build, this could lead to another rally for Bitcoin in the coming months, according to Senior Commodity Strategy Mike McGlone. McGlone:

“Stocks Too Hot vs. Bitcoin Maturing? The downturn in risk assets in the first half of the year has led to rapid deflation, which could bring pre – pandemic deflationary forces back in the second half. The main beneficiaries of this scenario could be gold, bitcoin and the long-standing US Treasury. ”

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Text credit: Bitcoinist

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