Bloomberg analyst Eric Balchunas has reduced the chance of the SEC denying a spot Bitcoin ETF to just 5%, with fellow Bloomberg reporter James Seyffart indicating only black swan interventions from Gary Gensler or the Biden administration possible routes to denial.
Interestingly, over the weekend, with the traditional markets closed, crypto continued to trade as usual, with Bitcoin trading sideways and the rest of the market recording a considerable sell-off. Bitcoin traded between $43,500 and $44,400, showing a mere 2% swing. As of press time, the largest digital asset by market cap is bang in the middle of this range at $44,000 per CryptoSlate data.
However, altcoins such as BNB, Solana, Cardano, Avalanche, Dogecoin, Polkadot, Polygon, Shiba Inu, and ICP are all down at least 3% and as much as 9.7% as of press time.
Altcoins fall as Bitcoin trades sideways.
The most resilient altcoins appear to be Ethereum, XRP, Tron, Chainlink Litecoin, and Bitcoin Cash, which, while all still down, have recorded less than a 3% decline over the past 24 hours.
Since Saturday, Jan. 6, Bitcoin dominance has risen by 1.5%, reaching a peak of 54% before retracing slightly this morning, indicating the leading digital asset is solidifying its position in the market ahead of a potential landmark approval this week.
Bitcoin dominance (Source: TradingView)
One of the biggest losers of the weekend, Solana, fell as much as 13% against Bitcoin over the weekend and is still down around 9%. Solana peaked at $126 on Dec. 26, 2023, yet it has fallen 28% in the 13 days since to trade, as of press time, at $90.
Bitcoin has recovered from its cycle low of 38% dominance in the crypto market in mid-2023 to claw back to 54% on the hype of a possible spot Bitcoin ETF. This 39% surge puts its dominance at the highest level since April 2021, erasing all of the ground the rest of the altcoin market made on the asset during the last bull run.
Since Ethereum’s launch in 2015, Bitcoin dominance peaked at the start of 2021 at 75% before falling dramatically throughout the bull market, eventually trading within the 39% – 48% range for around 760 days. However, following the past two Bitcoin halves, BTC dominance has fallen consistently, with a drop of 64% and 38%, respectively, marking bottoms after around 510 days.
BTC dominance with halvings (Source: TradinvView)
Most interestingly, as highlighted on the indicator at the bottom of the above chart, Bitcoin dominance has had a near-perfect correlation with Bitcoin’s price since the start of 2023, the longest period of correlation since Ethereum’s entrance into the market.
This week is set to be one of the biggest ever for Bitcoin as all eyes are on the spot Bitcoin ETF approval process. A decision either way is sure to have an effect on the entire market with volatility expected across the board.
