Despite Falling Below $30,000, "Sell Altcoins and Hold Bitcoin"

Expansion of Bitcoin Share Amid Altcoin Plunge
Bitcoin Expected to Lead Future Rebound
Warnings of Further Decline Persist

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The cryptocurrency Bitcoin has fallen below $30,000, giving back all the gains it made this year. However, the decline in altcoins, so-called "junk coins," excluding Bitcoin, has been even more pronounced, leading to an increase in Bitcoin's share of the overall cryptocurrency market.

According to CoinMarketCap, as of 11:25 a.m. local time, Bitcoin is trading at $30,960, down 5.9% compared to 24 hours earlier.

Bitcoin was trading at $28,889 per coin around 10 a.m., down 12.46%, but it has since risen by about $2,000. The attempt to rebound in Bitcoin is attributed to the influx of bottom-fishing buyers that had not appeared until the collapse below the $30,000 level from the $34,000 range.

On this day, Bitcoin's price fell below $29,026, the level recorded at the end of last year. Bitcoin had risen close to $65,000 in April but returned to its original position within two months. The decline from the peak amounts to 54%.

Bitcoin is testing the $30,000 support level amid a series of regulatory blows from China, including mining and trading suspensions. Experts are divided between those who expect further declines and those who anticipate a rebound. Some suggest that if one continues to invest in cryptocurrencies, the portfolio should be adjusted to focus on Bitcoin.

Mike Novogratz, CEO of Galaxy Digital and a Bitcoin bull, said in an interview with CNBC that he expects further declines in Bitcoin, stating, "The next resistance level will be $25,000, but I am not too worried."

Novogratz added, "Despite the sharp price drop, the infrastructure of the cryptocurrency market is maturing. Hedge fund managers, pension funds, and banks are also entering the cryptocurrency market," showing continued faith in Bitcoin.

Katie Stockton, founder of Fairlead Strategies, argued, "Liquidity is natural in cryptocurrencies. It has been so in the past and is just passing noise."

Matt Maley, chief market strategist at Miller Tabak Asset Management, told Bloomberg News, "With the $30,000 level broken, many market participants will be prompted to throw in the towel," predicting a short-term downtrend as inevitable.

Graph showing the change in the proportion of coins in the cryptocurrency market capitalization. The proportion of Bitcoin (red line) has been on the rise over the past month.

Interestingly, despite Bitcoin's sharp decline, its share of the overall cryptocurrency market has actually increased. According to CoinDesk, Bitcoin's share of the total cryptocurrency market capitalization reached 47%, the highest in a month. Bitcoin's market cap share had steadily fallen from 69% in January to 39.6% on May 16. This was due to the surge in altcoins such as Ethereum and Dogecoin, but in this recent crash, altcoins have fallen more sharply, reversing the situation.

On this day, Ethereum and Dogecoin also fell sharply by 8% and 16%, respectively, compared to 24 hours earlier, showing relative weakness against Bitcoin. Dogecoin, which surged with the support of Tesla CEO Elon Musk, dropped from a peak of 71 cents to 18 cents, a decline of 70% from its high. Ethereum, the second-largest cryptocurrency by market cap that was challenging Bitcoin's position, also plunged from a peak of $4,300 to $1,800, showing a steeper decline than Bitcoin.

Matthew Deep, co-founder of Deep Stack Funds, predicted that Bitcoin's market dominance would expand again as a result of this crash. In an interview with CoinDesk, Deep explained, "The best cryptocurrency investment strategy right now is to hold Bitcoin and sell altcoins."

He added, "Even if the market declines, Bitcoin's drop will be less than that of altcoins, and when the market recovers, Bitcoin will recover faster than altcoins," he forecasted.