KEY POINTS

  • Bitcoin's value continues to fall after experiencing successive rallies
  • Other cryptocurrencies such as Ether have seen a surge in value
  • A weakening Bitcoin could provide a big boost to alternative cryptocurrencies

After surging to all-time highs in the past seven months, Bitcoin is slowly showing signs of weakness. 

The largest cryptocurrency has hit recent lows in the past weeks, plunging near $47,000 early Friday, and in the process diminishing the so-called "bitcoin dominance," or the ratio of BTC's value to the overall market capitalization of digital currencies. It has fallen to as low as 48% for the first time since 2018, Coindesk reported. 

The price drop in Bitcoin came as Ether, the second-largest cryptocurrency belonging to the Ethereum blockchain, soared to a new record high of $2,607, or up 256%. Technical indicators project bullishness for ETH, to reach $2,725 and potentially $3,210 since bouncing off the resistance level of $1,400.     

However, Bitcoin’s market value which currently stands at $931 billion still constitutes a large part of CoinGecko’s basket of 6,831 digital coins with a total market value of $1.9 trillion. Ether’s market cap share is about 14%.

While Bitcoin's supremacy in the cryptocurrency market may have been tempered, it still is up 88% this year following its record-breaking $65,000 price in April. It has since faded to around $55,000 amidst traders boosting the prices of other cryptos such as Dogecoin.

DOGE, which started as a meme cryptocurrency and for over seven years was priced at only $0.05, has surged by 18,450% to almost a dollar in just a year. It has climbed 50-fold in 2021.    

The rapid acceleration in cryptocurrency prices is reminiscent of the last big bull run in 2017 and early 2018, highlighted by a spate of so-called initial coin offerings (ICOs), many of which resulted in huge losses later in 2018.    

Fundstrat analyst David Grider told CoinDesk in an email, “it’s a signal the market is risk-on and ‘alts’ are outperforming.”   

The silver lining of a weakening Bitcoin is other cryptocurrencies getting the opportunity to boost their values, which some traders have been waiting for years.  

The arrival of the first cryptocurrency exchange on the Nasdaq, Coinbase, is a sign of the frenzy over bitcoin and other virtual currencies The arrival of the first cryptocurrency exchange on the Nasdaq, Coinbase, is a sign of the frenzy over bitcoin and other virtual currencies Photo: AFP / KAREN BLEIER