Crypto Market Positions Itself for Altcoin Rally Post-Trump Inauguration, Analysts Believe

Analysts believe the crypto market could be positioning itself for a massive altcoin rally after Donald Trump's inauguration on Monday.

Crypto market may be setting up for altcoin rally post Trump inauguration: Coinbase analysts

The crypto market could be setting up for a massive altcoin rally after Donald Trump’s inauguration on Monday, according to analysts at Coinbase.

In a recent analysis, Coinbase analysts noted that the slight drop in Bitcoin’s [BTC] dominance earlier this week drove the latest altcoin pump.

“Meanwhile, the drop in BTC dominance from 58.5% to its support level of 57.3% during the inflation print relief rally on January 15 suggests to us that traders may be positioning for an outsized altcoin market rally on the back of positive catalysts for risk assets and crypto,” the analysts wrote in part of their weekly market commentary.

Chris Burniske, a partner at crypto VC firm Placeholder and former ARK Invest crypto lead, also highlighted BTC dominance in his analysis, echoing a similar sentiment.

“Importantly for the long tail, $BTC dominance has been slowly fading since late November ’24 – fireworks if that continues,” he said.

According to Coinbase analysts David Duong and David Han, stablecoin inflows are another bullish signal for a likely altcoin pump.

They noted strong capital inflows in the space and a huge portion of it went to altcoins as BTC and ETH recorded outflows.

“Stablecoin supply – perhaps the most clear proxy for capital flows to these long tail assets in our view – increased by $1.3B last week, a continuation of trends we’ve observed over the past two months. This stands in contrast to net outflows from US spot BTC and ETH ETFs of $457M and $206M respectively,” the analysts noted in the report.

However, another indicator, ETH/BTC, doesn’t seem to be aligning with the rest, at least at the time of writing this report.

This ratio tracks ETH’s relative performance against BTC, with the same rallying during November’s strong altcoin season.

At press time, this ratio is down to a new record low of 0.31. As part of the altcoin sector’s barometer, this doesn’t bode well for the anticipated altcoin rally, especially if the November trend is repeated.

That being said, altcoins like Fartcoin and XRP were the weekly winners, with nearly 100% and 30% gains, respectively. Solana [SOL] also logged 30% gains, while Hedera posted 22% gains.

It’s also worth noting that Hedera and XRP were among the top performers in November’s altcoin run too. It remains to be seen whether they can sustain the momentum this time.