Bitcoin Sheds Midweek Gains, BTC Price Back Below $24K

Bitcoin (BTC) price marched past $24,500 during Thursday's trading session as the broader cryptocurrency market traced a relief path into the green. The flagship cryptocurrency climbed to a multi-week high of $24,768 on the back of a positive CPI July report, which provided a much-needed midweek boost. It, however, failed to exploit the favorable macro environment and cross into the $25K zone.

The BTC/USD pair has since slid back down below $24k and was at the time of writing down roughly 2.45% on the day. The latest pullback on Friday has knocked off almost $1,000 from BTC 24-hr high price, thwarting any immediate advancement to higher grounds. It also sets Bitcoin on a consolidation path ahead of the weekend, barring any macroeconomic influence.

July's US Consumer Price Index leaves a fleeting impact

On Wednesday, the US Bureau of Labor Statistics released inflation data for July, which revealed a year-on-year CPI increase to 8.5% – 20 basis points below the market expectation. The equivalent figures for April, May and June were 8.3%, 8.6% and 9.1%, respectively. The noticeable decline in the YoY increases has been attributed to the falling prices of gasoline and energy, which helped offset the contrasting increase in food and shelter indices on a grand scale.

Economists caution that the slight easing of pressure doesn't necessarily guarantee slumping CPI figures in the coming months.

“When we look at what really matters for the Fed, it's that core number, and year over year that did not come down for core CPI [..]There is a lot of data left before the next meeting. The next CPI number, I think, is going to be even more important,” Victoria Fernandez remarked in an interview on CNBC's Squawk Box.

Fear and Greed Index is back above 40, investors remain apprehensive

This week's superficial price action in the Bitcoin market has expectedly not triggered any reaction among investors. The crypto Fear and Greed index has crossed 40 for the third time this week, alternative.me data shows. The index revisited 42 on Thursday and has remained, indicating that a positive mood is developing.

Nonetheless, investors have hesitations – reasonably so, considering Bitcoin has failed to hang onto broad-based gains it has accrued this week. The BTC/USD pair was unable to sustain the midweek boost and quickly retraced after reaching a local high of $24,918. The dip printed a striking upper wick in the pair's daily candlestick chart.

Bitcoin's performance over the past couple of days has been eclipsed by several altcoins, including Ethereum, which is holding onto a 14% profit in the last 7 days. Cardano's native token (ADA) made 5.87%, while Bitcoin has gained 2.60% during this period. This isn't the only metric it has shown weakness in. Its dominance has relaxed by nearly 10% since June 12.

Ethereum and alt markets signal an altcoin season

TradingView's cryptocurrency market share chart shows that Bitcoin has shed around 8% in the last two months. Still leading the market by almost twice the dominance of Ethereum, the next biggest asset, Bitcoin now commands 40% of the entire market- down from a peak of 48.50 % in mid-June. The current dominance figure has been since January.

Bitcoin's dominance rose to its highest point earlier this year, not long after Terra's collapse. The Do Kwon project suffered an unrecoverable blow as its stablecoin TerraUSD depegged. The events leading to the eventual abandonment of the old Terra chain sent the cryptocurrency market into a spin, with many retail investors pulling out the holdings they could salvage.

In addition to raising a regulatory alarm and triggering a series of investigations, the crash sparked an exodus as many retailers resolved to steer clear of altcoins. Most ‘migrating' investors settled on Bitcoin as a safer camp hence the steady rise in Bitcoins dominance between May 11 and June 11. The majority of altcoins appear to have gained ground, putting investor's a pickle.

Bitcoin price largely influences the performance of altcoins, although the latter group occasionally moves out of swing fuelled by niche-specific bullish developments. Blockchain center.net data shows that the performance of altcoins relative to Bitcoin over the last 90 days has been leaning towards the ‘altcoin season' margin.

The Altcoin Season Index has rapidly increased and was observed at 90 points at writing – 15 more than the ‘altcoin season' margin threshold of 75. Meanwhile, Ethereum has been the biggest beneficiary of Bitcoin's woes, swallowing the market share lost by the leading cryptocurrency. Its market share has increased from 14.75% on July 11 to 20.57% at the time of writing.

To learn more visit our Investing in Bitcoin guide.