Bitcoin’s share of total crypto market value is the highest in about 20 months, a sign of the cautious mood in digital assets.
The token wavered near $25,000 on Thursday, giving it a capitalization of $484 billion — or 45.8% of the value of the more than 10,000 coins tracked by CoinGecko. That’s the highest percentage since October 2021.
The U.S. Securities & Exchange Commission in lawsuits against Binance Holdings Ltd. and Coinbase Global Inc. last week deemed a raft of smaller tokens to be unregistered securities. That designation led to a selloff in such coins as they could become harder to trade.
In contrast, U.S. officials view Bitcoin as a commodity, helping it to weather the worst of the wider slide caused by the SEC spotlight on so-called altcoins such as Binance’s BNB, Cardano’s ADA and Solana’s SOL.
Read more: The Tainted 19: The Digital Tokens the SEC Says Are Securities
“Traders are more inclined to keep their money off the table in the midst of this regulatory backlash, especially when it comes to altcoins,” said Michael Safai, partner at Dexterity Capital.
The Federal Reserve’s signal that further monetary tightening is likely after a pause in its hiking cycle this month weighed on crypto sentiment generally.
Bitcoin rose about 2% to $25,470 as of 4:05 p.m. in New York on Thursday, climbing back above the closely watched $25,000 level. It touched the lowest since March earlier.
‘Slippery slope’
“Given Bitcoin has been unable to get off the canvas in recent days, a test of the 200-day moving average is looming,” said Tony Sycamore, a market analyst at IG Australia Pty. “On that note, it’s imperative that the 200-day holds on a closing basis, otherwise it’s a slippery slope back to $20,000.”
Bitcoin options data from the Deribit crypto derivatives platform shows an elevated concentration of bearish bets at a strike price of $24,000 for June and September expiries, suggesting that price zone is an important test area.
At the same time, a gauge of implied price swings in the largest digital asset remains depressed.
“Implied volatilities are still very low by historical standards, suggesting the market does not expect major moves at this point,” said Caroline Mauron, co-founder of digital-asset derivatives liquidity provider OrBit Markets.
Bitcoin has partially rebounded from last year’s crypto rout. But the 2023 bounce has ebbed to 51%, hamstrung by the U.S. clampdown and ebbing liquidity.
