Bitcoin Dominance Grows, Altcoins Face Uphill Battle

As Bitcoin's influence grows, altcoins are struggling to keep up. Many wonder if the days of big gains for altcoins are over.

Bitcoin’s strong buy signals and rising dominance are putting altcoins in a difficult position. As BTC pulls more attention and investors shift their money, many altcoins are facing sharp declines.

According to data from CoinGecko, prices of major altcoins fell between 10% and 30% in just one week. Ripple [XRP] dropped nearly 10% but stayed above $2. Cardano [ADA], however, saw a bigger drop, losing 18% and slipping below $1. Ethereum [ETH], on the other hand, held stronger, dropping just 6% while staying above $3,500.

Interestingly, not all altcoins suffered the same fate. Some tokens, such as Hyperliquid [HYPE] and Pudgy Penguins [PENGU], managed to thrive even in the weakening market. Prices of HYPE rose by 40%, and those of PENGU soared by an impressive 425%. These exceptions show that even when the market takes a downturn, some tokens can still perform well.

However, on-chain analyst Joao Wedson has warned traders to stay cautious with altcoins. According to him, Bitcoin’s dominance recently hit a bottom above 54%, and it’s likely to grow stronger in the coming weeks. When Bitcoin dominates, It often means that investors are gradually shifting their money out of altcoins and into BTC or stablecoins.

Moreover, Wedson also noted that BTC’s dominant 90-day change had recently turned positive for the first time since last November’s altcoin rally. Consequently, this indicates that BTC is steadily gaining strength, which, in turn, could continue to keep altcoins under pressure.

The Altcoin Season Index, which tracks how well altcoins perform against Bitcoin, recently dropped to a monthly low of 47%. This shows that altcoins are losing momentum. While some see the current low prices as a chance to “buy the dip,” Wedson advises caution.

Altcoins like XRP and ADA have already seen major losses, and the overall market remains weak. A strong recovery might not come soon unless market conditions change dramatically.

The upcoming “Santa rally” could bring hope to altcoin investors, as the market sometimes sees a year-end boost. However, this is not guaranteed. A stronger recovery might only happen in 2025 if a new bullish trend takes hold.