Bitcoin holds $30,000 and increases its dominance to 2021 levels

Cryptocurrencies remain calm after last week´s remarkable rises. Bitcoin (BTC) has fallen 0.3% in the last 24 hours, but manages to hold the $30,000 level, while Ethereum (ETH) has dropped slightly more and is already trading below $1,850.

The truth is that the queen cryptocurrency briefly lost $30,000 in the last hours of Thursday, although it quickly recovered this level and returned to $30,200, the level at which it has been moving in recent sessions. Still, it is some way off the yearly high of $31,300 it reached following applications by BlackRock and other major financial firms to create Bitcoin spot ETFs.

Craig Erlam, senior market analyst at OANDA, believes that part of this moderation in investor optimism may be because the market is still acutely aware of the lawsuits filed by the Securities and Exchange Commission (SEC) against Binance and Coinbase, two of the world's leading crypto exchanges. "The SEC lawsuits against Binance and Coinbase have not been forgotten but they’ve certainly drifted into the background and been overtaken by far more promising news flow," the expert stated.

For his part, Edward Moya, senior analyst at OANDA, believes that much of this rally is due to the market's expectation that one of these products, be it BlackRock's, ARK Invest's or another, will be approved before the end of the summer. Likewise, he commented, "Any major setbacks with a BlackRock ETF rejection and a Grayscale defeat could temporarily kill the rally, but optimism will still remain that and the ETF will eventually get done."

"Initial resistance comes from the $34,000 level and if we do see a Bitcoin ETF approval institutional, momentum could take the rally as high as the $40,000 level," Moya added.

Be that as it may, what is certain is that Bitcoin is set to close out a good month by managing to rally more than 12% and having improved after two slightly pessimistic months for the world's largest cryptocurrency. The underperformance of alternative digital assets and euphoria driven by news around spot Bitcoin ETFs has also led to Bitcoin's dominance, the rate showing the market share of the world's largest cryptocurrency, reaching 52% for the first time since April 2021.

"With some newer tokens facing intensified regulatory scrutiny in the U.S., BTC has pulled ahead in 2023. We can see that BTC’s 85% return, year-to-date is outpacing most of the other major digital assets," noted Kyle Waters, an analyst at digital asset research firm CoinMetrics.

For his part, Ben Laidler, global markets strategist at eToro, also stressed that correlation with tech stocks "has recently plummeted," making the latest gains "exclusively crypto." "This is positive after the crypto winter of 2022, ahead of the upcoming halving of Bitcoin and future regulatory clarity, including the implementation of MiCA in the EU," the expert added.

In this regard, Laidler explained that the SEC's regulatory actions have opened "a gap" in the performance of most cryptoassets and, "counter-intuitively, opened the door to greater institutional participation." "Meanwhile, the rally in tech stocks and artificial intelligence sucked the oxygen out of the asset class for those seeking growth, risk or tech exposure," he concluded.

On the business side, Coinbase has responded to the SEC and assured that the digital assets listed on its platform are outside the regulator's jurisdiction, since cryptos are not investment contracts and, therefore, cannot be securities. On the other hand, Binance's banking partner in Europe, Paysafe Payment Solutions Limited, will stop supporting the cryptocurrency exchange as of September 25.

In other market news, there have been losses of more than 2% for Ripple (XRP), Dogecoin (DOGE) and Litecoin (LTC). Cardano (ADA) drops 1% and Tron (TRX) and Solana (SOL) rebound moderately.