Bitcoin’s dominance in the cryptocurrency market has exceeded 63%, indicating a bearish trend for altcoins. Stablecoin flows are also pointing towards a risk-off phase, delaying any major breakout for altcoins. This shift in the market dynamics has been highlighted by Alphractal CEO Joao Wedson, who noted that fewer than 25% of altcoins are outperforming Bitcoin, signaling a Bitcoin Season.
Only four out of 57 altcoins have managed to outperform Bitcoin, with most altcoins experiencing significant losses ranging from -20% to -72%. PancakeSwap was one of the few altcoins that posted positive returns amidst the sea of red. The decline in altcoin dominance from 41% to 37% since November further reinforces the lack of investor confidence in non-Bitcoin assets.
The dwindling credibility of altcoins is further emphasized when filtering out Bitcoin, Ethereum, and stablecoins, with their market share dropping from 23% to 20%. The momentum in trading has also diminished, with the altcoin market cap and volume plummeting significantly from December to April. This decline in investor confidence is evident across both price and participation in the altcoin market.
Bitcoin’s rise in dominance has coincided with signals from the Stablecoin Supply Ratio, which peaked on 23 February before reversing sharply by April. This alignment suggests trend exhaustion and a shift in liquidity towards perceived safety. As a result, altcoin seasons are becoming increasingly rare, brief, and fragile, with investors staying cautious and parking their money in Bitcoin or waiting on the sidelines.
While there is short-term optimism surrounding altcoins, any rallies may remain isolated and brief without a structural shift in dominance and liquidity. The data indicates that the smart money is currently favoring Bitcoin, with altcoins facing challenges in gaining traction in the market. Overall, Bitcoin’s dominance above 63% reflects a consolidating market where capital flows into perceived safety, signaling a bearish environment for altcoins.
