Bitcoin price struggling to stay above water at $30,000
Bitcoin is losing market share to coins like ETH, UNI and DOT as the price struggles to stay above US$30,000 while interest fades.
At the time of writing Bitcoin is changing hands for US$31,234, down 1.9% on the day as it faces continued sell pressure.
The premier cryptocurrency in has been stuck in the US$30,000 - $35,000 corridor for the past week, stuck in a descending wedge since printing a new all-time high of around US$42,000 on 9 January.
Bitcoin price caught in a descending wedge pattern with $30,000 serving as resistance.
Several market events may have contributed to the continued decline such as weakening global stocks, stagnating interest rates in the US and a reduction in search interest of the term "Bitcoin" on Google. On Wednesday Wall Street saw the worst day of trading in months, with the S&P 500 and Nasdaq Composite index both falling 2.6% and indexes across most of Europe down this week. Some have connected the drop with the announcement by the US Federal Reserve on Wednesday to keep interest rates pegged near zero while continuing its bond purchasing program.
According to data from Google Trends, interest in Bitcoin has reduced by two-thirds since 11 January, two days after it set an all-time-high price of around $42,000. Interestingly the trendline of search volume demonstrates a cascading pattern reminiscent of the price data (seen above) for the same time period.
Bitcoin's total market share of the cryptocurrency market has also weakened alongside its price, falling from a high of 72.8% on 3 January to 63% at the time of writing. The overall market capitalisation of cryptocurrencies excluding Bitcoin has remained strong though, trending upward over the month as several altcoins have picked up the mantle while Bitcoin rests.
ETH, UNI and DOT rise in price and prominence
Ethereum has had a record breaking start to the year, setting a new all-time-high price of $1,450 and overtaking Bitcoin in daily transaction volume by a margin of 23%. Off the back of this momentum, it has increased its market share of the cryptocurrency market by 4.5% over January. This comes as record-high amounts of Ether leave exchanges, likely destined for staking as ETH 2.0 continues to roll out.
Uniswap, the golden child of the decentralised exchange scene, has risen by 58% this week, despite most other cryptocurrencies showing losses over the same time period. It set a new all-time high today around $15.50 before retracing slightly by the time of writing. According to CoinGecko data, Uniswap is now one of the top 15 exchanges by volume globally, likely due to its prominence and utility within the growing DeFi landscape.
DOT, the native cryptocurrency of the Polkadot blockchain network made waves recently when it "flipped" XRP to become the third-largest cryptocurrency by market capitalisation (excluding stablecoin USDT). DOT currently sits at $16.28 having gained 146% in the past 30 days and now accounts for 1.6% of the total market capitalisation of all cryptocurrencies. Investors are watching this one closely as parachains gradually roll out, which will bring a token economy to Polkadot, similar to the ERC20 economy on Ethereum.
Disclosure: The author owns a range of cryptocurrencies including at the time of writing