Bitcoin (BTC) hit 48-hour highs overnight into May 20 as the US dollar weakness gave the bulls some much-required respite. Macro conditions flip to mitigate pressure on risk assets, as one view gives BTC bears $14,000 capitulation “hopium.”
Dollar Strength Drops After 20-Year Record
Data acquired from TradingView recorded highs of $30,725 for BTC/USD on Bitstamp. Still striving to flip $30,000 to become reliable support, the pair nevertheless avoided a bigger retracement, helping calm the fears of the past week’s $23,800 capitulation event did not mark the bottom.
The U.S. dollar index (DXY) offered the background to Bitcoin’s relatively strong performance, coming off 20-year highs to lose 2% in one week. That seemed to relieve some pressure on the stock markets, with the S&P 500 finishing May 19 down by 0.58% compared to the past week, the NASDAQ 100 less.
While trading over 50% below its all-time highs, the biggest crypto managed to punish many latecomers to the market, according to one analyst.
Ki Young Ju, CEO of analytics platform CryptoQuant, wrote in a series of tweets on that day:
“Today, newbies who joined last year are in -34% loss.”
Ki referred to a chart of bands of the unspent transaction outputs (UTXOs) indicating the age of investments. The investors who had only experienced one ‘bear cycle’ before were now down 39%, he stated, while the older coins were still in profit.
He added:
“So here’s hopium for bears. If $BTC crashed so hard due to the macro crisis and all Bitcoiner institutions go underwater, it could go $14k based on historical MDD.”
Based on previous reports, many predictions of a major Bitcoin price retracement, some of them under $14,000 continue to circulate.
Buy Bitcoin NowAltcoins Are Rolling Over As Bitcoin Rises
In the meantime, attention focused on Bitcoin’s growing market presence over altcoins. After the Terra LUNA saga last week, the mood turned cold outside Bitcoin, and now, it seems like the altcoins are ceding dominance quickly.
At 44.8%, BTC’s of the general crypto market cap reached its highest point since October 2021 at the time of publication. One popular Twitter account IncomeSharks forecast:
“We could see dominance rally all the way back to 60%. This is why you need to be cautious on alts and trade them with tight stops. There’s a good chance we could see money leave alts and start going back to BTC.”
60% Bitcoin market dominance would represent a level not seen since March 2021. A popular analyst Pierre warned:
“Most alts I’ve been watching haven’t been able to break their H4 trends despite yesterday’s move on BTC. Would still expect most of them to die twice harder if BTC was to remain stuck within this same range, or resolve to the downside.”
