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Bitcoin’s recent surge has solidified its position as the top cryptocurrency, with its market dominance reaching nearly 60% — a level last seen in April 2021.
While Bitcoin has been gaining value, altcoins have stayed mainly stagnant. However, many market analysts believe Bitcoin’s dominance might be temporary, hinting that a potential altcoin rally could be around the corner.
Bitcoin’s Dominance is Almost 60%
On October 17, 2024, Bitcoin’s dominance in the cryptocurrency market reached 58.7%, marking its highest level in 3.5 years. Simultaneously, Bitcoin’s price surged to $67,500, hitting a 10-week high. Although it briefly corrected to $64,880, Bitcoin rebounded and continued trading above $67,000, with its market capitalization climbing to $1.32 trillion.
A key factor driving this price increase could be the influx of capital into Bitcoin ETFs. Just two days earlier, U.S. Bitcoin ETFs recorded net inflows of $371 million. Over the last three trading days, Bitcoin ETF products attracted more than $1.1 billion, according to Farside Investors. These inflows have significantly contributed to Bitcoin’s price momentum and market dominance.
Historically, Bitcoin’s dominance has spelled trouble for altcoins, and the current trend is no exception. While Bitcoin gained 2.5% daily performance, most altcoins remained flat or experienced declines. Notably, Ethereum’s (ETH) ratio to BTC weakened, falling below 0.039, marking its lowest point since April 2021. This underperformance of altcoins suggests that Bitcoin’s surge draws attention and liquidity away from alternative cryptocurrencies, leaving them struggling to keep pace.
Will the Altcoin Season Start Soon?
Despite Bitcoin’s dominance nearing its peak, many analysts believe this trend may be short-lived. Many analysts predict that Bitcoin’s dominance will top out at around 60%, suggesting that Bitcoin must first experience a major rally before altcoins can regain momentum.
Also Read: What is the Alt Season and will it happen again in this cycle?
A similar scenario played out in August 2020, when Bitcoin’s dominance climbed steadily until December 2020. However, after hitting its peak, Bitcoin’s dominance saw a substantial decline throughout 2021, ushering in a highly active altseason where altcoins surged in value. This historical pattern may offer insight into the potential for a coming altcoin resurgence.
A similar pattern may unfold now, as Bitcoin’s dominance has risen by around 4 percentage points since August 2024, with expectations of continued growth through the end of the year. Analysts anticipate that once Bitcoin’s dominance peaks and starts to decline, an altcoin season (altseason) will emerge in 2025.
One such analyst, Moataz Elsayed (Eljaboom on the X platform), predicts that Bitcoin’s dominance will weaken soon, allowing meme coins and other significant altcoins to gain traction. In anticipation of this shift, many traders are gearing up for the potential rise of altcoins once Bitcoin’s dominance begins to level off, preparing for the next wave of crypto market movements.
