Bitcoin dominance hits 59.75% as ETH/BTC slips below key support

Bitcoin dominance surged this week, reaching 59.75% and extending its lead over the rest of the crypto market.

Meanwhile, BTC made an attempt to break past its recent high of $69,500, a level it hasn’t touched since July. That push didn’t last long though. Bitcoin pulled back and found support around $65,000, now hovering as if biding time.

This market action is bringing out the bulls and setting up for more volatility, especially with institutional investors ramping up their stakes. ETF inflows for last week stood strong at $997.7 million. That was the third consecutive week of net inflows.

With BTC dominance surging, it’s squeezing altcoins and shaking up major pairs, especially Ethereum’s performance against BTC.

ETH/BTC dips

Ethereum struggled this week, with the ETH/BTC pair slipping 5.85% after breaking below its key support level of 0.03850. It hit a new low at 0.03625.

Adding fuel to the fire, Tether (USDT), the largest stablecoin in circulation, took a nosedive following reports of a possible U.S. government investigation into the company.

It fell to a low of 0.9965 before recovering to the 0.9980 range. Tether CEO Paolo Ardoino dismissed the allegations as unfounded.

Ardoino’s words haven’t been enough to cool market fears, as this isn’t Tether’s first run-in with scrutiny this month. Overseas, geopolitical tension added to the uncertainty. In the Middle East, Israel launched retaliatory airstrikes on Iran following a missile attack around three weeks ago.

These events pushed markets down further. U.S. stocks also took a hit, with the Dow Jones Industrial Average and S&P 500 falling by 0.61% and 0.03%, respectively. And Bitcoin briefly dropped to $65,500 amid the turmoil.

Short-term holders anticipate higher profits

Meanwhile, Bitcoin short-term holders (STH) are showing their confidence in the price growth. STH metrics are particularly useful for analyzing the behavior of investors who have held Bitcoin for less than 155 days.

At this point, the market correction phase shows STH selling slightly above their entry points, a pattern which means that they’re seizing minor gains but largely holding for more upside.

Historically, the average exit peak for STH profit-taking has been 1.23, while the current level hovers near 1, meaning most recent buyers are sitting at around a 1% profit.

The few remaining sellers are either breaking even or making minimal returns, which only reinforces the trend of holding through these minor corrections. On-chain data shows just 2.3% of STH in a loss position. 

Next week’s non-farm payroll data is now a key focus as it could affect the Fed’s next move. Market bets on a November rate cut of 25 basis points have reached 95.1%, making it almost a given.

That would likely keep institutional investors bullish on Bitcoin and could lead to another wave of inflows, as BTC continues to hold appeal against a weakening U.S. dollar.

Permanent Ethereum holders, meanwhile, are still accumulating. These guys show no signs of panic. Data shows that even during that bearish phase in 2020, they continued to buy and hold ETH, ignoring short-term price action.