Bitcoin Dominance Reaches 58.8%, Its Highest Since Early 2021, Despite Hopes for an Altcoin Season

Despite hopes for an altcoin season, Bitcoin's dominance keeps growing, defying the usual trend where capital shifts to altcoins as the market matures. This figure shows Bitcoin's market share compared to all cryptocurrencies.

Bitcoin’s dominance is rising again, now standing at 58.8%. This figure, which represents Bitcoin’s market share compared to all cryptocurrencies, has been steadily increasing from 51% in December, reaching its highest point since early 2021.

Many crypto investors have been eagerly anticipating an “alt season,” a period where altcoins outperform Bitcoin, generating substantial returns for those who invest in them. Typically, this occurs after Bitcoin experiences a significant rally, as traders cash out some of their gains and channel them into riskier and potentially higher-reward investments in altcoins.

However, despite optimal conditions such as Bitcoin stability, increased market liquidity, and burgeoning institutional interest, which usually pave the way for altcoins to take center stage, this shift hasn’t happened as quickly as expected.

Why Is Bitcoin Dominance Growing?

Bitcoin’s dominance continues to grow due to several key factors. Corporate accumulation strategies, particularly from Strategy keep buying Bitcoin, which creates consistent buying pressure.

Besides, there are also more new tokens than ever, which can spread out investment instead of focusing on established altcoins. Finally, spot Bitcoin ETFs make it easier for traditional investors to buy Bitcoin, while most altcoins don’t have the same level of access.

The approval of Ethereum ETFs last summer was expected to reduce Bitcoin’s dominance, but the impact has been minimal. While ETH ETFs initially saw strong interest from investors, they didn’t manage to boost the altcoin market as anticipated.

The potential for alt season might still exist, merely delayed, and future events could serve as catalysts for a shift in favor of altcoins.

Analyst Sparks Optimism for Altcoins

Rekt Capital, a well-known analyst on X, formerly Twitter, sparked optimism for an upcoming altcoin season with a key technical signal. He shared a chart of the altcoin market cap, highlighting that if it manages to close above a certain level this week, it could set the stage for the next leg up.

After a steep decline in early March, which saw several weeks of gains wiped out, the altcoin market cap briefly dipped below the $200 billion mark. However, it ultimately closed the week above that level and has since been on a recovery path.

At the time of writing, the total market cap of cryptocurrencies excluding Bitcoin is approaching the $250 billion mark.

According to Rekt Capital, breaking above the $250 billion mark on a weekly timeframe could be crucial for setting the stage for a potential rally in altcoins.

If altcoins can break above the $250 billion mark, it could set the stage for a rally to $315 billion, which would be an indication that the bottom has been reached in this bear market cycle.

To reach the December 2024 high of $451 billion, even more, growth would be needed. At present, it seems like a long shot, but in the rapidly changing world of crypto, anything is possible.