Bitcoin Shows Strength Against Ethereum, Altcoin Season In Jeopardy

The growing Bitcoin dominance and recent decoupling from Ethereum have sparked concerns over the viability of the altcoin season.

As Bitcoin continues to rally, albeit within a narrow range, and caps off another week with an interesting price trend, a recent analysis has sparked concerns over the fate of the altcoin season.

The apex cryptocurrency has shown resilience in the face of broader sideways movement in the crypto market. Despite displaying strength, BTC has struggled to hold the psychological $100,000 price mark amid hawkish macroeconomic developments.

However, an interesting trend has emerged with each instance of Bitcoin’s recovery to the $100,000 level, which has now been highlighted by on-chain analytical firm Lookonchain in a recent post, sparking議論 within the crypto community.

Bitcoin Outperforming Against Ethereum

According to yesterday’s post, there appears to be a strong decoupling between Bitcoin and the altcoin leader, Ethereum. Each time BTC reclaimed the $100,000 price point, Lookonchain noted that ETH trended lower than the previous occurrence.

To put this in perspective, when Bitcoin first reached $100,000 on December 5, Ethereum was trading at $3,900. After a retest, the premier asset once again crossed the notable price mark on December 11, but ETH was now trading a bit lower at $3,800.

Meanwhile, as Bitcoin continued to reclaim $100,000, ETH sustained that steady price decline, trading at $3,700, $3,400, $3,200, and $2,800 in the last four scenarios. This signaled a strong decoupling between the two crypto giants.

Furthermore, this growing outmuscling is evident on the ETHBTC chart, with Ethereum now trading at 0.0281 BTC, marking a four-year low against Bitcoin as its price weakness intensifies.

Interestingly, this trend is also observed among other major altcoins, including Dogecoin, BNB, and Cardano.

What Could Be Driving This?

This growing outperformance by Bitcoin could be attributed to its increasing market dominance. According to data from TradingView, Bitcoin's share of the crypto market has seen a substantial surge recently, especially over the past few days.

To provide some perspective, on Monday, Bitcoin’s dominance soared to a four-year high of 64.34%, showcasing its increasing market presence over the past two months. Although it has retraced slightly to 60.19% today, this rising stat could explain why Bitcoin has outperformed altcoins.

Moreover, this increasing lead for Bitcoin also follows a growing influx of capital into the pioneer asset. A significant source of this flow is from the US spot exchange-traded funds (ETFs), which have recorded a cumulative positive flow of $1.1 billion in the past five days.

Altcoin Season: A Glimmer of Hope or Doomed to Fail?

Meanwhile, Bitcoin's decoupling against altcoins has also sparked speculations regarding the possibility of an "altseason." This topic was addressed by Sam Wouters, an executive at River Financial, in a recent analysis.

Emphasizing his earlier stance on the matter, he went on to state that there will be no altcoin season—a market phase characterized by altcoins massively outperforming Bitcoin—during this bull cycle in his recent commentary.

The marketing head based this analysis on Bitcoin's market cap decoupling from other cryptocurrencies.

Another prominent analyst, Murad, shared a similar perspective in a recent analysis. According to him, the industry has shifted permanently, with Bitcoin now being the main attraction.

Furthermore, the analyst also noted that the increasing number of new altcoins being deployed into the crypto market also contributes to this new reality.

DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.