Why is Bitcoin price stuck?

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Bitcoin (BTC) is oscillating within a sideways channel as bulls lack strength into the yearly close.

Data from Cointelegraph Markets Pro and TradingView shows BTC price 20-month highs above $44,000 remain in place.

BTC/USD 1-day chart. Source: TradingView

Bitcoin market dominance passes 2-month lows

Despite maintaining its year-to-date gains, Bitcoin is giving way to altcoins this month.

As Cointelegraph continues to report, Bitcoin’s share of the overall cryptocurrency market cap has struggled to capitalize on rampant gains seen earlier in 2023.

Bitcoin market cap dominance 1-day chart. Source: TradingView

At 51% as of Dec. 28, dominance has retraced from its recent peak of 55.3%, and currently sits at its lowest level since mid-October.

Commentators explain that this gives altcoins a chance to make up for lost time, and the charts show the phenomenon beginning to play out already.

Binance Coin (BNB) and Solana (SOL) led the gains over the Christmas period, while looking forward, some believe that largest altcoin Ether (ETH) will soon follow suit.

“Likely, history is repeating itself in which we’re peaking with the Bitcoin dominance prior to the Bitcoin halving,” Michaël van de Poppe, founder and CEO of trading firm MN Trading, told subscribers on X (formerly Twitter).

“That means that the bull market on Altcoins have started and Ethereum will take over from here.”

A subsequent post gave a “likely” ETH price target of $3,000.

Bitcoin ETF fatigue begins to show

The buzz over the potential approval of the first United States Bitcoin spot price exchange-traded fund (ETF) has subsided, and with it market hype.

With decision day at most two weeks away, there remains little positioning among institutions in advance of the event — something explained as a tactic in itself.

Nonetheless, signs of volatility entering immediately on the announcement are everywhere — the approval, consensus warns, could form a “sell the news” event.

This is bolstered by abnormally positive funding rates on derivatives markets, these currently at their highest levels since when BTC/USD hit its current all-time high in November 2021.

This, analysis confirms, suggests an overwhelming expectation of further BTC price upside to accompany the ETF move — possibly before any reactionary selling takes place.

“Even with the rapid price surge, the funding rate has consistently stayed within the range, but now it is definitively breaking out of the box,” Mignolet, a contributor to on-chain analytics platform CryptoQuant, wrote in one of its Quicktake updates on Dec. 21.

“Clearly, the current range reflects a lot of bullish sentiment, indicating an overheated zone in anticipation of an upward movement.”

Profit-takers keep up the pace

Rangebound BTC price action is being assisted by day-to-day selling activity, on-chain data shows.

Related: BTC price up 160% in 2023 — 5 things to know in Bitcoin this week

Traders continue to take profits at current levels, helping to preserve a stubborn range, which has yet to tackle even pre-ETF targets nearer to $50,000.

As noted by Checkmatey, lead on-chain analyst at research firm Glassnode, selling overall remains well within historical norms. It could even offer a positive insight into what might come next.

Bitcoin realized profit chart. Source: Checkmatey/X

“Profits are being taken for Bitcoin, however nowhere near the extremes we see near local and global market peaks,” he told X subscribers on Dec. 27.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.