Bitcoin went into a short-lived correction yesterday. The bulls won eventually, not only buying the decline but also propelling it to new highs since May.
Bitcoin is up 4.5% in the last 24 hours and is trading at $58,000, at the time of writing. Over the previous seven days, BTC was up 6%.
The Bitcoin dominance index has paused and is now at 45.8%, indicating robust demand for alternative cryptocurrencies.
Bitcoin's Rally Running Out of Fuel?
The Cryptocurrency Fear and Greed Index is at 70, which corresponds to the greed mode, indicating that there is still room for further growth.
It is probably quite limited as, on the other hand, the RSI index for the BTC/USD pair on the daily chart shows dangerous proximity to an overbought level.
Other Cryptos Could Follow Suit
The alternative cryptocurrency market is also showing a very positive end to the working week. The major coins are rising, following the market leader.
Demand for altcoins often grows following the exhaustion of Bitcoin's growth momentum, but in this case, it could be about broad investor interest in the entire cryptocurrency market.
Altcoins are probably attracting more interest from the retail sector. For them, buying altcoins is a more psychologically comfortable investment due to the lower nominal price and the belief in the growth potential of new names.
Chinese Crackdown is a Blessing in Disguise for Cryptos
The Chinese authorities decided to crack down on cryptos. But, that is good news for the crypto space because the miners have moved to the US, which is a more stable market.
The US has become a leader in Bitcoin's hash rate network. The country currently holds 35.4% of the network's computing capacity.
In addition, the distribution of computing power across many different territories makes the network more secure.
Conclusion
The voices of those who talked about the temporary nature of inflation have noticeably diminished. And, we hear about it as a threat rather than a desirable goal for central bankers.
Of course, it is difficult to think of BTC as a tool to hedge against inflation risks.
Yet, it is one of the main reasons retail investors, who do not have many tools in their arsenal to protect their capital from losing purchasing power due to inflation, are buying cryptocurrencies.
Bitcoin's relatively small market size is a positive. As central banks continue to print money amid rising debt and inflation, the cryptocurrency market has the potential to delight investors even more.