Key Points
- Bitcoin’s market dominance has dropped as its price dipped, leading to speculation of relief for altcoins.
- Altcoins like Story IP, Maker, and Hyperliquid have posted double-digit recoveries.
Bitcoin’s recent price drop below $90K was accompanied by a 2% decline in its market dominance. This development has led market analysts to speculate about potential relief for altcoins.
Bitcoin Dominance and Altcoin Recovery
According to pseudonymous analyst Stockmoney Lizard, the simultaneous decline of Bitcoin’s price and market dominance is a new trend. He stated, “Also new: BTC dropping while BTC.D is dropping…This means many Altcoins are forming local bottoms while BTC makes new lows.”
During Bitcoin’s drop to $86K, its market dominance slipped from 62.28% to 60.9%. This decrease is often interpreted as a capital rotation from Bitcoin to altcoins. In fact, a 10% drop in Bitcoin dominance last November triggered an altcoin pump that led to XRP posting gains of over 500%.
Analysts’ Predictions and Altcoin Performance
Analysts like Arthur Hayes and Galaxy Digital’s Alex Thorn have predicted a $75K-$85K price range for Bitcoin. If their projections are validated and the new trend continues, Bitcoin’s dominance could drop further, providing additional relief to the altcoin market.
Several altcoins have already seen double-digit recoveries. Specifically, Story [IP] and Celestia [TIA] increased by 34% and 22% respectively, while Hyperliquid [HYPE] and Maker [MKR] also experienced significant recoveries.
The altcoin market cap increased from $1.16T to $1.17T over the same period, marking a $10B increase. However, the altcoin season index was at 25, suggesting it was a Bitcoin season.
The ETH/BTC ratio, which measures Ethereum’s price performance relative to Bitcoin, surged 8% as Bitcoin’s dominance declined, boosting some altcoins. However, the ratio has an overhead hurdle at 0.03 and has declined 32% since December, potentially limiting a strong recovery outlook for the altcoin sector.