Following the collapse of the Libra memecoin, investors partially withdrew from the altcoin market, and Bitcoin’s market dominance increased to nearly 60%, reaching its highest level in recent years.
This marks a 5% increase over the past month and a 12% increase over the past year, suggesting that investor sentiment is shifting towards BTC.
Market analysts point to the growing institutional interest in Bitcoin as one of the key drivers of this dominance. Hina Sattar Joshi, Director of Digital Assets Sales at TP ICAP, said that Bitcoin’s growing dominance reflects the consolidation of institutional sentiment and the growing influence of professional investors in the digital asset space.
In contrast, Solana (SOL) and other altcoins have seen increased volatility. Solana is currently trading at $178 and is down about 6% in the past 24 hours. Joshi noted that the altcoin market remains largely individual-driven and is more sensitive to sharp price swings compared to Bitcoin.
“The pullback in altcoins is a reflection of institutional capital flowing into Bitcoin, which is now seen as a stable investment relative to other digital assets,” he said.
Bitcoin’s sharp rise in dominance follows the recent crash of the Libra memecoin, a Solana-based token backed by Argentine President Javier Milei. The token’s market value fell by nearly $4 billion in a matter of hours after the project’s team allegedly dumped its tokens at its launch, prompting widespread accusations of market manipulation.
Bitcoin’s dominance has accelerated as investors lose confidence in high-risk altcoins, with many traders reallocating funds to BTC as a safer alternative.
According to some analysts, Bitcoin’s medium-term outlook remains bullish, with expectations of continued institutional inflows via spot Bitcoin ETFs and the long-term impact of the 2024 halving.
Ryan Lee, Chief Analyst at Bitget Research, noted that if Bitcoin holds above key support levels and ETF inflows remain strong, it could rise to $100,000 or above in the near future.
*This is not investment advice.
Read the full article here
