Market Tussle: Is the Change in Cryptocurrency Trends Limitating the Altcoin Boom?"
Cryptocurrency Market: Is Altcoin Season On The Horizon?
The persistent surge in Bitcoin's dominance has sparked discussions about the possibility of an altcoin season. However, some experts have raised concerns about the current market cycle.
According to recent reports, Bitcoin Dominance (BTC.D) has reached its highest level in over four years, standing at 64.5%. While analysts expect a pullback in BTC.D, predicting an opening for altcoins, a market expert has issued a word of caution.
Bitcoin's Rise and Altcoin Growth: A shifting landscape?
Last week, BeInCrypto reported that Bitcoin Dominance is seeing a significant increase, a trend that some analysts attribute to an incoming pullback. Mister Crypto, for instance, noted that BTC.D may face rejection at a major trendline due to strong historical resistance.
"Bitcoin dominance is about to get rejected here. As soon as this happens, altcoins will rally hard!" he wrote.
Another analyst is optimistic about the upcoming shift, claiming that an altcoin season is imminent. "Bitcoin Dominance is collapsing. Altseason is coming this year. You just need patience," Merlijn The Trader posted.
However, Scott Melker, the Host of The Wolf Of All Streets Podcast, holds a different view. He contends that this cycle is fundamentally different from the previous ones.
Historically, investors have rotated their investments between Bitcoin and altcoins, causing variations in Bitcoin's dominance. However, Melker argues that in the present scenario, new money is flowing into Bitcoin from retail investors, institutions, and even governments, but not migrating to altcoins.
"This time, new money is flowing into Bitcoin from retail, institutions, and even governments - and it's not trickling down to altcoins. It can't go from an ETF into a meme," Melker remarked.
Melker stresses that the decline of altcoins against Bitcoin is primarily triggered by holders selling their altcoins out of necessity, not moving capital into Bitcoin, a sign of "capitulation."
However, Bitcoin investors are not selling their Bitcoin to buy altcoins, according to Melker's analysis. Thus, altcoins may require an influx of external capital to recover rather than relying on the conventional flow of funds from Bitcoin.
A shift in market behavior
This change in market behavior aligns with broader trends in the cryptocurrency space, with Bitcoin increasingly being perceived as a store of value amid inflation concerns. "This cycle may change Bitcoin from a risk asset to an inflation hedge since there is nowhere else but gold and BTC to park money," an analyst commented.
Embracing this narrative, the US Dollar Index (DXY) plummeted to a three-year low, triggering a Bitcoin rally. Bitcoin surged past $87,000, recording highs previously seen on Liberation Day, with the rally continuing. The largest cryptocurrency has seen a 0.91% increase in the last day, currently trading at $88,408.
The dollar's decline has also benefited gold, which surged to a new all-time high (ATH) of $3,456 today. "Gold prices are now up +47% over the last 12 months," The Kobeissi Letter revealed, reinforcing the narrative of Bitcoin as a reliable investment, standing alongside gold as key safe-havens in times of economic uncertainty.
BeInCrypto always strives for unbiased, transparent reporting. Readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.
Enrichment Data:
- Institutional demand via Bitcoin ETFs has driven BTC to new highs (above $100K in early 2025), creating a 272% demand-supply imbalance in late 2024[2].
- Retail participation: Nearly 80% of ETF inflows originated from retail investors, demonstrating broad-based confidence in Bitcoin as a primary crypto asset[2].
- Altcoin growth typically lags BTC by 6-18 months in bull markets. Analysts anticipate altcoins to gain traction in late 2025 if Bitcoin dominance weakens and institutional investors broaden their portfolios[5][1].
- Increased trading volumes on decentralized exchanges like Uniswap signal growing altcoin interest, particularly for AI and DeFi-focused projects[5].
- A drop in Bitcoin’s market dominance below 60% (from current ~60-65% levels) could accelerate an altseason, according to historical patterns[5][1].
- Despite the rise in Bitcoin's dominance, some analysts predict an imminent pullback, opening up potential opportunities for altcoins.
- Mister Crypto anticipates Bitcoin dominance to face rejection soon, leading to a significant rally for altcoins.
- Merlijn The Trader agrees with the upcoming altcoin season, but Scott Melker disagrees, suggesting that the current market cycle may be fundamentally different from previous ones.
- Melker argues that new money is flowing into Bitcoin but not migrating to altcoins, making it difficult for altcoins to recover without an influx of external capital.
- Bitcoin's increasing perception as a store of value amid inflation concerns aligns with its recent surge past $87,000 and the plummeting US Dollar Index.
- Gold prices have also surged to a new all-time high today, reinforcing Bitcoin's position as a reliable investment and key safe-haven in times of economic uncertainty.
- If Bitcoin dominance weakens and institutional investors broaden their portfolios, analysts anticipate altcoins to gain traction in late 2025, with growth typically lagging BTC by 6-18 months in bull markets.
