Bitcoin soars as it briefly surpassed the $34,000 threshold this week. Despite analysts’ positive outlook on growing small-investor participation, the rest of the cryptocurrency market hasn’t been able to benefit from the surge.
As per Deutsche Digital Assets Head of Research André Dragosch, trading related to the news of a potential approval of a spot bitcoin (ETF) intensified. Thereafter, pushing up the price above $30,000 and squeezing shorts. The short squeeze, in turn, led to the liquidation of more than $250 million of short positions over the past three days. This was according to data from Coinglass. Bitcoin has managed to soar and cross the $34,000 threshold. However, the rest of the cryptocurrency market has not been able to benefit from the surge. Despite analysts’ positive outlook on growing small-investor participation.
The Bitcoin Dominance Index (BDI), which is used to measure Bitcoin’s share of the overall crypto market, has reached levels that haven’t been seen since April 2021.
Over the past year, there has been a noticeable trend in the cryptocurrency market where a rise in Bitcoin’s value fails to have a similar impact on other digital assets. This trend has continued this week, as the Bitcoin Dominance Index (BDI) reached its highest level since April 2021, standing at approximately 54.4%. This increase has been steady since the collapse of the crypto exchange FTX in November 2022.
During the past year, the performance of other digital assets in comparison to Bitcoin has been less impressive, especially when compared to the previous crypto bull market. For instance, Ethereum’s native crypto asset, Ether, has only increased by 14% in the past year, whereas Bitcoin has seen gains of roughly 66%.
At the same time, Bloomberg reported that crypto tokens are being delisted from exchanges. This was at a rate never before seen in the industry’s history, according to data from Kaiko. Nearly 3,500 crypto token delistings have already taken place. Coinbase (COIN), which is currently being sued by the U.S. Securities and Exchange Commission, has delisted 80 trading pairs this month alone.
Dragosch noticed a rise in Bitcoin wallet activity for both small and large investors. He highlights an increase in the “median value of transfer volumes on the Bitcoin blockchain.” Therefore, this indicator shows small investor participation. Moreover, it provides some insights into the price direction of bitcoin.
According to Dragosch, sustained bullish trends in the crypto market require the participation of small investors.
Bitcoin has surged around $35,000, but the rest of the crypto market has not benefited. The BDI has reached its highest level since April 2021. While the performance of other digital assets has been less impressive. There has been an increase in wallet activity for small and large investors. It is a positive sign for sustained bullish trends in the market. The future of the cryptocurrency market remains uncertain. However, Bitcoin’s recent surge has certainly sparked a lot of interest and speculation.