Altcoins are Melting: Bitcoin is Back in the Center!

Bitcoin has once again taken center stage in the cryptocurrency market as its dominance surpassed 50%, reaching its highest level in a month. This development has sparked heated debate within the crypto community, with market watchers closely monitoring whether investments previously dispersed among altcoins will flow back into Bitcoin, potentially setting the stage for a significant rally in the second half of the year. Here are the details…

Bitcoin dominance takes flight

On September 18, Bitcoin’s dominance rose to an impressive 50.2%. This resurgence comes on the heels of Bitcoin’s dominance, which briefly reached 52% in late June, and signals a clear trend for Bitcoin to reassert its influence in the crypto space. For those unfamiliar with the term, Bitcoin dominance refers to the proportion of Bitcoin transactions in the entire crypto asset market. Essentially, it represents the degree to which Bitcoin controls the market. Traditionally, an increase in Bitcoin dominance is seen as a precursor to a market rally, indicating an increase in buying pressure.

Market experts have predicted that Bitcoin’s dominance will continue to grow in the second half of the year, citing several factors as potential catalysts. In particular, the anticipation surrounding the listing of a Bitcoin spot ETF and negative news affecting altcoins are believed to be important triggers. In general, the weakening of altcoins is interpreted as a positive sign for Bitcoin’s dominance.

Altcoins are melting

Markus Thielen, a senior researcher at Matrixport, echoed this sentiment during an interview on CoinDesk TV, saying, “Bitcoin is experiencing increased buying pressure due to the expectation of spot ETF approval, while altcoins are facing a period of decline.” Thielen’s altcoin weakness prediction is based on several factors:

  • Sale of cryptocurrencies held by FTX: Just one day before the September 12 approval hearing for the sale of FTX assets, altcoins known to be held by FTX showed a noticeable downward trend. This has raised concerns that a significant dispersion of altcoins in the market could reduce investor sentiment by intensifying downward pressure.
  • Decrease in profit in Ethereum-based DeFi projects: Ethereum’s decentralized finance (DeFi) ecosystem, once a major driver of altcoin gains, has shown signs of slowing profitability. This change may cause investors to reconsider their positions in altcoins in favor of Bitcoin.
  • Convergence of venture capital token sales: The timing of upcoming venture capital (VC) token sales could cause funds to be reallocated to Bitcoin, adding another layer of uncertainty to the altcoin market.
It Is Impressive With Its Performance In This Altcoin League!  Here's Why…

Ethereum, one of the altcoin market pioneers, has remained consistently weak since its peak in April, underscoring the growing expectations for Bitcoin’s dominance. Ethereum’s underperformance has fueled speculation that investors may increasingly turn to Bitcoin, which they perceive as a more stable and attractive investment option.

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