Bitcoin price declined throughout last week. The largest asset by market capitalization, is struggling to keep its head above volatile waters, at $41,000. At the time of writing, BTC price is $41,101. Crypto analysts expect a bounce from the current price level, if the asset fails to rally, further correction in BTC price is likely.
Whales on one of the largest derivatives exchange, Bitfinex, have likely positioned themselves for a shift in Bitcoin trend. This is evident from the sudden decline in Open Interest and an increase in stablecoin reserves on the exchange.
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Bitcoin Open Interest and price. Source: CryptoQuant
Mark Cullen, a crypto analyst on X (formerly Twitter) expects Bitcoin price to bounce from $41,000. If BTC fails to bounce from this level, Cullen predicts a correction in the asset. A bounce from the current level could send Bitcoin above $44,000 and a correction could push BTC to $39,080.
Bitcoin price chart
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.