Ethereum (ETH), the leading altcoin in the market, has been struggling against Bitcoin (BTC) recently, with its performance against the king of crypto being less than impressive for investors. With Bitcoin Dominance on the rise, most of the capital in the crypto market is still flowing towards BTC. Despite its potential to sway investor sentiment towards altcoins, Ethereum has been in a severe downtrend since January, losing over 56% of its value. This bearish outlook for Ethereum has been reinforced by falling network activity and fees.
The ETH/BTC pair has been near the levels seen in the summer of 2019, with hopes that the levels from late 2020 would prevent further losses. However, this has not been the case, and further losses for ETH/BTC are expected as confidence in Ethereum remains low. This is not good news for the overall altcoin market, as it raises concerns about whether altcoins will struggle to keep up with Bitcoin’s performance. The question remains whether investors should expect sustained altcoin gains in the near future.
While the altcoin market has shown signs of recovery in the past two weeks, it is still in a bearish trend. The TOTAL3 altcoin market cap, excluding Ethereum, fell below $750 billion in early April but has since climbed back above this level. However, altcoins need to surpass recent high levels for long-term strength to be demonstrated. The altcoin season index was at 20, indicating that it was still Bitcoin Season, with the market a long way from reaching alt season status.
Bitcoin Dominance (BTC.D) tracks the share of BTC’s market cap against the entire crypto market cap. The rising trend of Bitcoin Dominance over the past two years has impacted altcoins, with ETH/BTC being a notable example. With BTC.D above 63.8%, a level that previously acted as both support and resistance, further dominance by Bitcoin is expected. While some altcoins have seen short-term gains, long-term forces may limit the possibility of a significant altcoin rally in the near future.
Investors who are hopeful for an altcoin market rally in the near future should remain cautious, as the current market conditions favor Bitcoin dominance. Despite recent gains in some altcoins, the overall trend remains bearish. For altcoins to show long-term strength, they must surpass recent high levels, demonstrating sustained momentum against Bitcoin. As the market continues to evolve, investors should closely monitor Bitcoin Dominance and overall market trends to make informed decisions about their investments.
