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Bitcoin (BTC) has maintained its dominance over the overall cryptocurrency market, reaching the highest market cap share relative to other cryptocurrencies for over three and a half years.
Yesterday, BTC’s market cap dominance rose to 60.6%, its most significant level since April 2021. While BTC’s price is down less than 4% from last week’s near-record high above $73,000, major altcoins have been hit harder. Ethereum (ETH) and Solana (SOL), for example, are down about 10% from their recent peaks
Smaller cryptocurrencies were not spared from the decline either, with the combined market cap of altcoins outside the top 10, represented as “OTHERS” on TradingView, reaching its lowest point relative to Bitcoin since the beginning of 2021.
Bitfinex analysts commented on the trend in a report published on Monday: “Whenever BTC pulls back, altcoins see significant declines. With BTC absorbing most of the capital flow into crypto assets, altcoins are struggling to keep up, and without a new catalyst, the chances of a near-term reversal appear slim.”
The report also noted that the speculative interest that occasionally supports altcoin rallies appears to have diminished. The return of funding rates in perpetual futures markets to normal levels suggests that interest in high-risk altcoin investments is decreasing.
Bitfinex analysts predict that Bitcoin’s outperformance over altcoins could continue in the coming months. “We believe that the altcoin market could experience more declines than Bitcoin in the medium term, primarily due to speculator disinterest,” the report said.
*This is not investment advice.