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26.11.2021 11:04 AM
Bitcoin losing its dominance

While ether is gaining momentum, bitcoin has almost come to a standstill. This puts the dominance of the world's number one cryptocurrency under threat. Over the past week, the price of bitcoin has been hovering below $60,000, and many crypto supporters express doubts on whether the growth of BTC will continue at the end of the year, or investors will switch back to altcoins and other digital coins. At the moment, the market cap of the crypto sector is estimated at $2.81 trillion, and the dominance of bitcoin in the total market share is gradually decreasing. Bitcoin now accounts for about 40% of the total market value, which once again proves that investors are getting more interested in other crypto assets.

Bitcoin VS Ether

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As the data shows, bitcoin's presence in the market fell to 39.7%, while ether's dominance has improved and is currently close to 19%. These are very serious changes, since the second largest asset by market cap may soon overtake the world's first cryptocurrency.

Bitcoin currently has an overall market cap of around $1.1 trillion. Yet, this can hardly help BTC reassert its leading position in the market. BTC's dominance hasn't been this weak since mid-May 2021. The second leading crypto asset, Ethereum, has about 19% of the market dominance and a market valuation of around $525 billion.

Of course, ETH still has a long way to go to reach the level of BTC. However, last year, ether significantly gained ground, thus posing a threat to bitcoin whose pace of growth has slowed down lately.

Notably, bitcoin's market cap peaked at 70% on January 3, 2021 but then steadily declined. Most likely, such a rise happened amid the inflow of new users to the market in October-December 2020. This resulted in a new large rally of the first cryptocurrency. By the way, it boosted the rise of other altcoins, in particular, ether.

Other digital coins

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But Ethereum is not the only asset with a big market share. There are many other crypto assets in the top 20 that are also gaining value and increasing their presence in the market. Thus, the BNB coin controls 4.02% of the entire crypto market, while the USDT stablecoin accounts for 2.74%. The breakthrough coin Solana has grown a lot in value this year and controls 2.43% of the overall value of the crypto economy. Cardano is another market participant with more than 2%.

However, BTC now maintains its $1.1 trillion capitalization denominated in fiat currency, while around 11,100 crypto assets make up the rest of the $1.68 trillion market share.

Chinese miners flee to Russia

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China's crackdown on the crypto-mining sector at the beginning of this year has led to a massive migration of miners to more friendly jurisdictions. Miners are moving their equipment to new locations around the world, with Russia reportedly being one of the most attractive destinations. Russia, Kazakhstan, and the US now host most of the Chinese mining farms.

These countries are so attractive to miners thanks to some regulatory clarity or cheap energy. According to the Financial Times, the world's 14 largest cryptocurrency mining companies have relocated more than 2 million mining machines from China after the government launched a nationwide crackdown on the industry in May.

The report also shows that at least 205,000 mining equipment was transported to Russia. About 87,849 devices were transported to neighboring Kazakhstan.

However, the two former Soviet countries are facing some obstacles. For example, Russia still has no proper regulation of this area. Moreover, some officials express the view that cryptocurrency mining should be recognized as a business activity and should be taxed accordingly. Kazakhstan, on the other hand, is experiencing a sharp shortage of electricity for which miners are mainly to blame. The authorities consider licensing this type of activity and raising electricity tariffs for miners.

Technical picture for Bitcoin

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After a bounce from the support of $56,400, bitcoin is gradually recovering to the $60,000 area. However, today, $3 billion futures options should expire which could lead to a serious surge in volatility. BTC's further growth will depend on whether bulls manage to regain control of the resistance area at $60,000. If this scenario is true, we can expect a jump towards the $64,000 level. If bitcoin depreciates and breaks below $56,400 after the options expiration, this will be a challenge for us. In this case, BTC will come under more pressure and may retest the lows of $53,600 and $50,900.

Technical picture for Ether

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Ether bulls seem to have broken above the resistance of $4,360. Now they need to strengthen their position. The immediate target will be the level of $5,890. Its breakout will enable a quick return to a yearly high of $4,780 and form a new upward rally for ether. The pressure on ETH may return if buyers' activity is low at the level of $4,360. A breakout of strong support at $4,150 will pull ETH down to the area of $3,880 and $3,680.

Jakub Novak,
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