- Bitcoin dominance recorded a yearly high last week.
- Bitcoin dominance has since been fading.
- Some expect altcoins to pop amid stalling Bitcoin dominance.
Cryptocurrency markets have seen tremendous capital inflows recently, sending Bitcoin briefly to $45,000 on December 5. However, the bellwether crypto has struggled since then, with its price retreating and market dominance sliding. If Bitcoin dominance continues falling, altcoin investors are poised to reap the benefits.
Pull Back in Bitcoin Dominance
Bitcoin dominance reached a year-to-date high of 55.3% on December 6 but has since been falling, plunging over 5 consecutive days before finding support at around 53% on December 12. However, after hitting support, Bitcoin dominance rose to an intra-day high of 53.2% at the time of writing, potentially signaling a comeback for the market leader
Zooming out, Bitcoin dominance bottomed at 38.9% in September 2022, followed by a period of stability before breaking into a macro uptrend by late November 2022, as the FTX collapse fostered a narrative around Bitcoin being a safer bet versus altcoin investing, leading to significant gains in Bitcoin dominance throughout 2023.
Commenting on the reversal in Bitcoin dominance’s uptrend, crypto consultant Nebraskagooner posited that a break of the 53% support level may send altcoins much higher.
Although 53% support was successfully defended, several altcoins have recorded strong seven-day performances, suggesting that altseason is brewing in the background.
Select Altcoins Already Booming
The top 10 altcoin performers in the biggest 100 tokens by market cap show a mixture of blue chips and more obscure offerings. BitTorrent (BTT) leads the pack, which has skyrocketed 167% over the past week, suggesting that demand for decentralized storage solutions is winding up.
Large-cap offerings see Avalanche and Cardano among the top 10 gainers, adding 79% and 48% in value, respectively. Avalanche is benefiting from a series of partnerships involving real-world assets and gaming, while Cardano is coming into its own as a serious contender for DeFi.
These strong altcoin performances demonstrate that investors are increasingly plowing capital into alternative offerings as speculation around Bitcoin’s staying power ramps up.
On the Flipside
- Institutions prefer the regulatory certainty of dealing with Bitcoin, which is generally considered decentralized and exempt from securities requirements.
- The altseason metric from the Blockchain Center has a current reading of 55. The company states that a score of 75 and above equates to an altseason.
- Although low-cap altcoins have the highest potential for percentage gains, they also carry a higher risk of failing to gain traction.
Why This Matters
Despite a 2% drop since December 6, Bitcoin dominance has been on a 13-month uptrend, and the macrostructure remains intact. The recent strong performances of select altcoins demonstrate that investors want to diversify as Bitcoin stalls.
Read about November’s top-performing altcoins here:
5 Altcoins That Dominated the Top 50 Cryptos this Week
Find out about the SEC’s efforts to serve Richard Heart with court papers here:
SEC Serves Richard Heart over Crypto Securities Violations
Source link: https://dailycoin.com/altcoins-poised-to-explode-as-bitcoin-dominance-wanes/
