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MicroStrategy CEO seems to embrace Bitcoin maximalism

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MicroStrategy’s decision to use Bitcoin as its primary reserve currency has Michael Saylor seemingly favoring the asset over altcoins.

In a Sept. 20 tweet, the business intelligence company’s CEO stated that he considers Bitcoin (BTC) to be a crypto asset network, unlike tokens like Ethereum (ETH) or stablecoins, which he referred to as “crypto-application networks.”

Posting a chart from analytics site Bitcoin Dominance, the CEO claimed that the coin’s dominance “has advanced from a low of 71.05% on December 20, 2017 to 93.57% today.”

However, Saylor is intentionally selective when it comes to this data. Bitcoin Dominance’s figures do not include initial coin offerings or stablecoins, but rather “only includes coins using proof-of-work that are attempting to be money.”

According to CoinMarketCap, which takes stablecoins like Tether (USDT) into account, Bitcoin’s dominance was at a yearly low of 56.67% as of Sept. 13, while Messari shows the metric closer to 59%. Both are far from the 93% dominance Saylor tweeted. Ethereum and DeFi have been driving alt season this year, as the 10 largest DeFi tokens now represent a market cap of roughly $9 billion compared to Bitcoin’s $200 billion.

Though initially claiming “Bitcoin’s days are numbered” in 2013, Saylor has turned bullish on the crypto asset in recent weeks following MicroStrategy’s purchase of $250 million worth of BTC as a reserve currency in August. He announced on Sept. 14 that the firm subsequently bought an additional $175 million of BTC.

“Bitcoin scales just fine as a store of value.”

Saylor isn’t alone in the crypto community in discounting the vast majority of altcoins. Emin Gün Sirer, the creator of the first proof-of-work-based crypto, said in April that Bitcoin maximalists are correct to label “95% of the things out there as scams.”

“They’ve just recycled something that belongs to someone else,” he said.





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3 reasons why Bitcoin price has not been able to rally back above $40K

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The ongoing story for the past couple of months in the cryptocurrency market has been confusion on whether Bitcoin (BTC) is destined for another leg down or is finally ready to break out toward new highs.

Bitcoin’s price history and data from previous corrections suggest that the current struggles for the top cryptocurrency could persist for a little bit longer due to the strengthening dollar, the possibility of decreasing economic stimulus and a slew of technical factors connected to Bitcoin’s price action.

A strong dollar threatens Bitcoin’s recovery

According to data from Delphi Digital, one of the biggest factors placing strain on risk assets around the globe is the strengthening U.S. dollar which appears to be attempting a trend reversal after falling below 90 in late May.

DXY 1-day chart. Source: TradingView

Rising dollar strength put a halt to the year-long uptrend in the 10-year US Treasury yield which is also a reflection that the economic expansions seen in the first half of 2021 are beginning to lose steam and there is a threat that a new wave of Covid-19 infections threatening the global economic recovery.

Fractals and the Death Cross suggest the correction is not over yet

The short-term outlook for Bitcoin remains bearish as previous instances of the “Death Cross,” which appeared on BTC’s chart in late June, have been followed by a corrective period that can last for nearly a year.

Bearish crossover of the 50 day and 200-day MA. Source: Delphi Digital

According to the analysts at Delphi Digital, the 12-month moving average is being tested as support, and a dip below this level would signal further downside for BTC price.

Bitcoin price testing the12-month moving average. Source: Delphi Digital

The 12-month moving average has been a key support level for Bitcoin historically, so how the price performs near this level could dictate whether the current uptrend remains intact.

Related: El Salvadorians take to the streets to protest Bitcoin law

Overall, caution is warranted for traders because low volumes have historically led to higher volatility when fewer open bids can lead to rapid price fluctuations.

As explained by Kevin Kelly, a certified financial analyst at Delphi Digital, “the short-term outlook turns quite a bit more bearish if and when we break those key levels” near $30,000.

Kelly said:

“I don’t necessarily think that we will see as nearly as significant of a drawdown as we did in say, post-December 2017, early 2018, and into the end of that year. But I do think, just given the structure of the market, that we could potentially be in for a bit more short-term volatility and potentially some more headwinds here, in the near term.”

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.