A commonly observed psychological bias among cryptocurrency enthusiasts can distort market analyses. According to Bitcoin $88,021 advocate Samson Mow, investors fall into a behavioral trap known as “unit bias” when evaluating altcoins. This bias leads them to favor cryptocurrencies that appear cheaper while ignoring those perceived as expensive. Mow emphasizes that investors should focus on supply and value multipliers rather than just price.
Price Visibility in Altcoins, But Value Remains Hidden
In statements made through social media, Mow argues that assessing cryptocurrencies based on a whole unit inflates values for non-Bitcoin assets. He asserts this approach creates a perception of Ethereum $1,628 being valued at approximately $9,200, XRP at $5,800, and Solana $139 at $3,400. These figures are compared to Bitcoin’s relative unit value, which is capped at 21 million coins.
According to Mow, even a fraction of one Bitcoin, specifically 1/21 million, trades at around $85,000 at current price levels. Therefore, comparisons made without considering Bitcoin’s divisibility lead to altcoins being perceived as cheaper than they actually are, misleading investors into a false sense of price advantage.
Nominal prices often serve as the primary consideration affecting investors. However, it is frequently emphasized that for a healthier market operation, fundamental indicators such as supply, use cases, and long-term sustainability should be prioritized.
Bitcoin Dominance Rises, Altcoins Face Pressure
Market data indicates that Bitcoin’s dominance in the cryptocurrency sector has reached 63%. This represents one of the highest levels since 2021. While some market commentators note that altcoins might experience relief if dominance drops below 60%, the current scenario reflects increased pressure on altcoins.
Market commentator Ted Pillows expresses, “When Bitcoin dominance falls below 60, altcoins will underperform relative to Bitcoin.” This assessment could signal potential disruptions in the altcoin market.
Macroeconomic uncertainties are exacerbating the situation. Particularly, former President Donald Trump’s tariffs and trade policies have created an atmosphere of general stagnation in the cryptocurrency market . Analyst DonAlt suggests that these policies undermine the likelihood of a lasting market rally.
Market Reactions Mixed, Investors Remain Vigilant
During the week, Bitcoin saw a 2% increase, reaching $87,105. Meanwhile, Ethereum experienced a slight pullback, and XRP and Solana remained stable. This indicates heightened interest in Bitcoin while investors adopt a cautious stance towards other cryptocurrencies.
Market participants tend to exercise caution in their current pricing strategies. The risks posed by unit price bias can directly impact investment strategies. Experts advocate focusing on supply-based calculations and fundamental indicators for healthier outcomes.
