Unlike previous market dumps, BTC’s dominance has declined.
Altcoins such as Story IP, Maker, and Hyproliquid have posted double-digit recoveries.
The drop in Bitcoin’s [BTC] price to $90k also marked a 2% decline in market dominance, leading one analyst to speculate that this could alleviate pressure on altcoins.
In fact, according to pseudonymous analyst Stokes Money Lizard, the decline in BTC dominance as BTC sells off is a new trend.
“Also new: BTC drops when BTC.D drops… This means many altcoins are forming local bottoms as BTC makes new lows.”
During the drop to $86K, BTC’s dominance fell from 62.28% to 60.9%. The decline in BTC dominance is typically viewed as a capital rotation from the king coin to altcoins.
Last November, the dominance fell by 10%, triggering a pump in altcoins like XRP, which saw a +500% increase.
BTC Dominance: Will Altcoins Recover?
However, analysts like Arthur Hayes and Alex Thorn from Galaxy Digital are calling for the king coin’s price to be between $75,000 and $85K. Thorn indicated that based on on-chain price imbalances and statements,
“Looking at BTC supply from a Price over Moving (URPD) perspective, most of the air is between $75-85K. The market may need to test that range. The 200D MA price is $81.6; if we test it, it could provide support.”
If these predictions materialize and a new trend continues, BTC’s dominance may further decline, providing more relief for the altcoin market.
That said, select altcoins have seen double-digit gains amid BTC’s struggles. Story [IP] and Celestia [TIA] grew by 34% and 22%, respectively, making them among the top daily performers on CoinMarketCap.
High liquidity [MKR] and Maker [MKR] also saw double-digit recoveries.
During the same period, the total market cap of altcoins increased from $1.16T to $1.17T, marking a $10B bump. However, the Altcoin Season Index stands at 25, indicating that it is BTC season.
Ambcrypto examined the ETH/BTC ratio to gain a better understanding of the altcoin market’s condition. This ratio calculates ETH’s price performance relative to BTC and is considered a barometer for the industry due to BTC being the king of altcoins.
The altcoin season observed in November and December last year accounted for 18% and 25% rallies in ETH/BTC. On Tuesday, as BTC dominance fell, the ratio surged by 8%, benefiting some altcoins.
However, since December, the indirect resistance of this ratio has been at 0.03, and it has decreased by 32%, limiting the strong recovery prospects for the altcoin sector.
In summary, a weak ETH/BTC ratio may hinder a stronger recovery for the broader sector.
