The entire crypto ecosystem is strongly influenced by the movements made by the price of Bitcoin, this is due to the large size of its market capitalization. For this reason, it is relevant to analyze this data, more today when we see BTC headed for a market of USD 200 billion again.
Bitcoin’s market capitalization as a health indicator?
When starting to investigate a crypto project, one of the first data that we find is its market capitalization, capable of reflecting the size of the capital that is within it.
This data is obtained from the multiplication of the total coins in circulation, and the price of each one. In principle, it would be giving an idea of the money that is invested in the project.
This is a metric that is also often used in traditional markets, for the investigation of the environment of the asset.
Although it can work as an excellent indicator, easily accessible, to measure the size of the market and its “success”, it is not a totally reliable piece of information, least of all in the cryptocurrency market, where we are not processing the real currency.
This data places everything in a single figure, without taking into account the amount of coins that are kept in custody by the development team, lost coins, or in trusts that are gradually dumped onto the market.
Without a doubt, the size of the market for a cryptocurrency is extremely important, but it should always be used in confluence with others, to obtain a more accurate appreciation of the health of the project.
Today the market capitalization of Bitcoin is USD 175 million, a truly incredible figure, more if we note that it is equivalent to 60% of the total of existing cryptocurrencies.
The highest moment in the size of the BTC market was in December 2017, when it reached USD 323 million. He is currently quite willing to reach $ 200 billion.
Bitcoin dominance on the rise
With the constant recovery of Bitcoin’s market capitalization, it is again subtracting dominance from other projects.
In the crypto winter crash of 2018, Bitcoin’s dominance fell by as much as 33%, while other cryptocurrencies moved inversely, gaining relevance in the ecosystem. Ethereum for example got to have more than 20% when this happened.
Currently the dominance of BTC is 64.92%. ETH decreased to 9.78%.
At the moment, the influence of the price of Bitcoin on other currencies is extremely strong, so if you want to maintain a broad view of the ecosystem, analyzing the largest is an excellent option.
Capitalization realized reaches new maximum
This is one of the alternative metrics to conventional capitalization. Its result is obtained from the multiplication of the price at which Bitcoin was traded the last time, and the size of each operation.
Despite the bearish sentiment at the end of last week, and the beginning of it, this metric marked a new historical peak.
According to data provider Coin Metrics, the realized capitalization reached a record of USD 106 billion, which should be classified as an excellent signal, as it indicates the growth of interest in the largest of the cryptocurrencies.
A first maximum was reached at the beginning of last week, and yesterday, a new one was made. As we have repeatedly commented here in Crypto Trend, there is not too much space for bears to generate profits.
Bitcoin price technical analysis
It seems highly feasible that the $ 200 trillion in Bitcoin’s market capitalization will be reached again in the short term.
Although we observed a small change in trend last week, the bulls are making a presence defending supports.
The escape above $ 10,000 again seems to be just around the corner, which would be an excellent trigger for a strong increase in the capitalization of the BTC market.
The 200-day SMA is currently bullish, supporting the appreciation that the price has obtained in recent months.
All our publications are for informational purposes, so they should not be accepted as investment advice under any circumstances.