Bitcoin dominance reaches 62.18%, up from 53% in December.
The growing number of new tokens weakens capital flow to altcoins. Bitcoin’s dominance in the crypto market has surged to 62.18%, up from 53% in December. Despite expectations for an altcoin season, BTC continues to gain market share. Traders typically expect capital to rotate into altcoins after Bitcoin rallies. However, this shift has not happened as anticipated.
Why Is Bitcoin’s Dominance Rising?
Several factors have contributed to Bitcoin’s growing dominance. Institutional investors continue accumulating Bitcoin, increasing demand. Companies like Strategy consistently raise funds to buy more BTC. This creates sustained buying pressure, keeping Bitcoin’s market share high.
The launch of spot Bitcoin ETFs has also strengthened Bitcoin’s position. These ETFs provide institutional investors with easier access to Bitcoin. Meanwhile, most altcoins lack similar financial instruments. This has made BTC the preferred choice for traditional investors.
Another key factor is the growing number of new tokens. With so many options, capital spreads across different assets rather than concentrating on established altcoins. This fragmentation has limited the potential for an altcoin rally.
Many expected Ethereum ETF approvals to reduce Bitcoin’s dominance. However, their impact has been smaller than anticipated. While ETH ETFs saw strong initial inflows, they failed to boost the broader altcoin market. As a result, BTC remains the dominant force.
Is Altcoin Season Still Possible?
Some analysts believe an altcoin season is only delayed, not canceled. Crypto analyst Rekt Capital has highlighted a key technical indicator. According to him, if the altcoin market cap closes above $250 billion, it could trigger a rally.
Altcoins recently recovered from a sharp decline in early March. The total altcoin market cap briefly dropped below $200 billion before bouncing back. It now sits at around $249 billion. A confirmed breakout above $250 billion could push the market toward $315 billion. However, reaching December 2024’s high of $451 billion will require more momentum.
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