The crypto bloodbath continues, with bitcoin down 13%, albeit to a lesser degree than it did last week. As a result, many migration patterns have been recorded in cryptocurrency investors as they search for the best safe haven. The first was the trip to the stablecoins to cover up from endless losses. However, the tide has turned on this once again as investors are now looking to return to Bitcoin, causing the dominance to rise.
Bitcoin is back in control
This drop affected all cryptocurrencies in the market, but the data shows that some more than others have had a worse time. Altcoins, especially small-cap cryptocurrencies, posted the highest losses as expected. However, Bitcoin is not excluded from this.
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The largest cryptocurrency by market capitalization is now down 13% in price, but this has not prevented it from re-establishing its dominance in the market, reaching a new high in six months. It now dominates at 44.4% and hasn’t been that high since October 2021.
BTC dominance returns | Source: Arcane Research
Mostly, the dip in investor sentiment to negative was one of the main factors driving investors towards bitcoin. As altcoins are getting hacked into the market, investors are looking to BTC, which they believe is a safer bet compared to the lower cap coins.
The result of this was the transfer of funds from altcoins to Bitcoin, leaving altcoins behind. As such, Bitcoin has recorded a decline of only 23% since the beginning of May, the lowest drop of all indicators.
Others recorded higher declines. The index of small companies came in with a loss of 28% in the past two weeks, and the index of medium companies with 31% in the same time period, while the index of small companies was worse with a decrease of 37%.
Stablecoins take a hit
The entire treasury disaster has begun to stabilize, but the effects of the collapse of the third largest stablecoin continue to affect its peer. After the floor treasuries were decoupled, some of that lower sentiment flowed into the largest stablecoin, USDT, which lost 10% of its market capitalization.
BTC dominance reaches six-month high | Source: Market Cap BTC Dominance on TradingView.com
One of the reasons for this was also the challenge of pegging the stablecoin with the bitcoin price dropping. It is also expected that some of the funds that left USDT have flowed into another stablecoin, the USDC, which happens to be the second largest stablecoin.
Both of these stablecoins continued to maintain their peg to the dollar. This makes UST the only stablecoin to lose its peg.
Featured image from Yahoo Finance, charts from Arcane Research and TradingView.com