As the US Presidential Election draws near, Bitcoin’s dominance over the cryptocurrency market is rising. This potentially dampens hopes for an altcoin season.
Bitcoin’s dominance, measured by BTC.D, has climbed to its highest level since 2021. This surge coincides with significant capital inflows into Bitcoin ETFs and a relatively stagnant performance of many altcoins.
Bitcoin For the Win
Bitcoin dominance measures the coin’s market capitalization relative to the total market capitalization of all other cryptocurrencies. As of this writing, it sits at 59.77, its highest level since April 2021.
When BTC.D climbs, Bitcoin’s share of the total cryptocurrency market capitalization is increasing relative to altcoins. BeInCrypto’s assessment of its key momentum indicators confirms the strengthening bullish bias toward the leading coin and the likelihood of extended dominance.
Bitcoin Dominance. Source: TradingView
For example, readings from the BTC.D’s moving average convergence/divergence (MACD) show its MACD (blue) resting above its signal line (orange) as of this writing.
This setup suggests that Bitcoin is currently seeing increasing strength within the crypto market, outpacing altcoins in terms of market cap share. It indicates that the current market conditions are less conducive for an altcoin season, with Bitcoin likely to outperform many of these assets in the near term.
BTC.D MACD. Source: TradingView
Demand for Bitcoin spot exchange-traded funds (ETFs) has surged recently, highlighting strong interest in the leading cryptocurrency. In a recent report, digital asset research firm 10X Research indicated that rising BTC ETF demand could drive Bitcoin’s price to $100,000 by January 2025.
“Bitcoin spot ETFs purchased $4.1 billion in October alone— the highest volume since March 2024—with buy momentum showing no signs of slowing as all ETF buyers remain profitable. Last night, spot ETFs acquired an additional $830 million in Bitcoin, bringing the 5-day total to $2.1 billion. With ETF demand going parabolic, Bitcoin is set to follow suit. If this trend holds, our quant signal also projects a potential rally to $100,000 by the end of January 2025,” the research firm wrote.
TOTAL2 Consolidates Within a Range
With capital flowing into Bitcoin ETFs, individual and institutional investors are more likely to prioritize BTC investments over less-established altcoins. As a result, less capital flows into the altcoin market reducing their price momentum and trading volumes.
TOTAL2 Price Analysis. Source: TradingView
This has played out as reflected by TOTAL2’s (the total market capitalization of all cryptocurrencies excluding Bitcoin) sideways movements since early August. While BTC.D has rallied, TOTAL2 has consolidated within the $967 billion and $856 billion price range.
This consolidation indicates that altcoin traders have been uncertain about the next direction prices will take. This has led to decreased volatility and trading volume, further delaying the altcoin season.
Altcoin Season Index. Source: Blockchain Center
Moreover, the altcoin season commences when at least 75% of the top 50 altcoins outperform Bitcoin over a three-month period. Recent data from Blockchain Center reveals that only 29% of these top altcoins have surpassed Bitcoin’s performance in the past 90 days — well below the 75% threshold required to declare an altcoin season officially.
Read the full article here
