Bitcoin's supremacy reaches 64% in 2025 - Are altcoins left in the giant's shadow?
Bitcoin [BTC] dominance (BTC.D) soaring in 2025 dampened the anticipated altcoin surge, but there's hope on the horizon.
The BTC dominance jumped a staggering 13% between January and April, shrinking the altcoin market (excluding BTC and ETH) from a mind-boggling $1.13 trillion to a more manageable $817 billion. That's an alarming 28% ($300B) crash in the altcoin market size.
Altcoin Reboot? Here's the Signal
Source: BTC dominance vs Altcoin market cap (Total3)
A rising BTC.D directs more capital from the altcoin realm to the king coin. In fact, epic altcoin surges, such as during last November, always follow a dip in BTC.D (capital flow from BTC to altcoins).
Despite the BTC.D hovering above the 64% mark and potentially scaling up to 66% or 70%, mimicking the 2021 cycle, the altcoin selling spree in 2025 seems to have stagnated. The altcoin market dump eased close to the $750B market cap level.
There's a resemblance to this bottom pattern in the altcoin market when the top 10 crypto assets are excluded.
The chart demonstrated that the altcoin market (excluding top 10 assets) rebounded at the $200 billion mark, a significant support zone in 2024 (cyan).
A closer investigation of the September-August 2024 period (white oval) revealed that the altcoin market loitered between the 50WMA and 200WMA (Weekly Moving Averages). The November rally occurred after a breach of this range.
If history repeats, a breach of the 50WMA could push the sector skyward towards the megaphone resistance near $500B. As of now, the segment is surging by 33%, implying a bit of a comeback for certain altcoins.
And guess what? The retreating USDT dominance (USDT.D) from the 6% barrier may offer extra fuel as traders allocate their stablecoins to their favorite altcoin treasures.
Nonetheless, the market remains deep in Bitcoin season, according to the altcoin season index (ASI) indicator on CoinMarketCap. The ASI reading was 18, hinting that BTC outperformed most altcoins over the past 90 days of trading.
A select few altcoins managed to outshine BTC during the past three months, such as Fartcoin [FARTCOIN], PancakeSwap [CAKE], and Monero [XMR], climbing 8%, 2.8%, and 19%, respectively, while BTC dipped 10%.
In conclusion, the altcoin selling spree seems to have stabilized, hinting at a possible broader rebound. However, a confirmed recovery can happen only if BTC dominance lessens its grip.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer's opinion.
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Enrichment Data:Several factors signal a potential altcoin rebound after the early 2025 sell-off. Here are some key indicators:
Factors Pointing Towards Altcoin Rebound
- Investor Trust Elevated: Latest data shows a rise in trading volumes and investor trust, a crucial element for altcoins' resurgence. This renewed faith is partially credited to broader market trends and regulatory developments[4][5].
- Regulatory Updates: Favorable regulatory moves, like the U.S. SEC's acceptance of a Litecoin ETF proposal, have boosted investor confidence in altcoins[3]. Similar regulatory backing could bolster other altcoins.
- Ethereum's Advance: Ethereum exhibits tremendous resilience by breaking resistance levels and is poised to continue upward, especially with the coming Pectra upgrade, which may enhance the sentiment of other altcoins[3].
- Altcoin Momentum Snowballing: Ethereum's comeback and Litecoin's ETF-related gains hint at a broader rally in the altcoin space. This momentum can potentially expand to other altcoins once they breach crucial resistance levels[3][5].
- Innovative Developments: The integration of blockchain and AI innovations is attracting investors, preparing them for future rallies. Cryptocurrencies like Dawgz AI, which fuse AI with meme coin popularity, garner interest for their long-term potential[5].
- Market Sentiment Indicators: A recovery in the Fear and Greed Index and other sentiment indicators suggests a shift towards bullishness, essential for altcoin reboots[4].
Market Prospects
The potential for altcoins to rebound is amplified as investors prepare for the next market rally. The combined impact of technical indicators, positive regulatory moves, and broader market trends suggests that the present could be an auspicious time for altcoin investments[3][5]. However, it's crucial to stay vigilant with regards to market dynamics and regulatory updates.
- The BTC dominance jump in 2025, while hindering an anticipated altcoin surge, has potentially stagnated the altcoin selling spree.
- The altcoin market, excluding top 10 assets, rebounded at the $200 billion mark in 2024, indicating a significant support zone.
- A breach of the 50WMA in the altcoin market could push the sector skyward towards the megaphone resistance near $500B.
- A decline in USDT dominance from the 6% barrier may provide additional fuel for altcoin investments as traders divert stablecoins to altcoins.
- Favorable regulatory updates, such as the U.S. SEC's acceptance of a Litecoin ETF proposal, have boosted investor confidence in altcoins.
- Ethereum's advance, accompanied by the coming Pectra upgrade, may enhance the sentiment of other altcoins, hinting at a broader rally in the altcoin space.
- The integration of blockchain and AI innovations is attracting investors, potentially setting the stage for future altcoin rallies.
