The co-founders of the prominent crypto analytics firm Glassnode, Jan Happel and Yann Allemann, have issued a cautionary note regarding a potential end to the “altcoin season” following the latest market correction. According to the analysts, the bullish trend altcoins have ridden since November may now be losing steam.
In a recent post on X (formerly Twitter), the pair, known under the alias Negentropic, highlighted how Bitcoin’s growing market dominance has left altcoins in a precarious position. Currently, Bitcoin Dominance (BTC.D), a measure of the percentage of the total crypto market cap held by BTC, has surged to 59%, signaling a significant rebound from prior weeks.
Bitcoin Leads While Altcoins Falter
“Should Bitcoin manage to stabilize above key psychological thresholds, altcoins currently in accumulation zones could see a rebound. Until then, Bitcoin is firmly in the driver’s seat, leaving altcoins trailing behind”,
the Glassnode co-founders explained.
The market has recently seen a notable outflow of Bitcoin from exchanges, indicating that long-term holders are liquidating their positions. However, these sell-offs are being swiftly absorbed by newer investors entering the space. Meanwhile, whales (large-scale holders) have quietly resumed accumulation, reflecting their confidence in Bitcoin’s long-term outlook.
Historically, rising Bitcoin dominance has often been a precursor to downturns for altcoins. In 2019, a similar pattern occurred when BTC.D exceeded 70%, leading to a prolonged stagnation in alternative cryptocurrencies. This trend underscores the risks altcoins face when Bitcoin asserts its market control.
Despite the current challenges, Happel and Allemann suggest that the narrative could shift if Bitcoin breaks through key resistance levels, creating room for a renewed altcoin rally. However, they caution that investors are increasingly favoring safer, more established assets amid ongoing macroeconomic uncertainties and regulatory concerns impacting the crypto space.
As the crypto market continues to exhibit volatility, its unpredictable cycles create both risks and opportunities for traders and investors alike. While altcoins might rebound under the right conditions, the prevailing trend is clear: Bitcoin remains the dominant force in the ecosystem, asserting its position as the go-to asset amid uncertain market dynamics.
