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The crypto market is going through a major shift with Bitcoin dominance at levels that haven't been seen in years. Therefore, when BTC captures more of the total crypto market share, altcoins lag behind and cannot catch up with speed, raising the burning question of whether an altseason, or the time when alternative cryptocurrencies significantly outperform Bitcoin, can even occur.
Bitcoin dominance, or the proportion of the total crypto market cap that BTC represents, now sits at near multi-year highs, indicating that capital is going into Bitcoin and not into altcoins.
Several factors are driving Bitcoin's increased market control:
- Institutional adoption of Bitcoin ETFs, drawing liquidity away from altcoins.
- Regulatory uncertainty impacting smaller crypto projects.
- Market fear and risk aversion, lead investors to favor Bitcoin over riskier altcoins.
Can an Altseason Still Happen?
Altseason historically occurs when Bitcoin shows stabilization following an upward price jump. That being said, liquidity keeps flowing towards BTC and causes altcoins not to breach levels of key resistances.
To start a potential altseason, experts predict:
- Bitcoin drawdown- Consolidation by Bitcoin might bring people's funds toward altcoins
- More activity by DeFi, NFT. This means some sort of rise in demand toward altcoins with new popularity for decentralized finances and non-fungible tokens.
- Improved market sentiment – Regulatory clarity and bullish trends could improve altcoin confidence.
While altcoins are suppressed, market cycles suggest that altseason is not entirely off the table. Until Bitcoin dominance weakens, though, altcoins may continue to struggle in the shadow of BTC.