- Bitcoin dominance climbs as altcoins struggle to regain momentum.
- Institutional interest weakens, but Bitcoin continues to lead the market.
- Whale activity signals growing pressure, hinting at Bitcoin volatility.
Bitcoin’s dominance in the cryptocurrency market has surged to 59%, signaling growing struggles for altcoins. Despite a nearly 3% drop in Bitcoin’s price, now hovering around $112,000, its market dominance continues to rise.
While Bitcoin’s price has been easing, altcoins have failed to gain momentum, leaving Bitcoin’s market share growing steadily. The Altcoin Season Index is at 34, further indicating that altcoins are underperforming when compared to Bitcoin.
According to Benjamin Cowen, Bitcoin’s dominance could continue its upward trend. In uncertain or consolidating market phases, Bitcoin tends to draw capital away from speculative altcoins.
Investors seeking security and liquidity are flocking to Bitcoin, which is seen as the safer and more stable option. This shift is fueled by a soft risk appetite among institutional investors, leading to subdued interest in altcoins.
Although institutional inflows into Bitcoin ETFs have cooled since mid-year, Bitcoin remains the preferred asset due to its liquidity and execution quality.
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Whale Behavior and Profit-Taking Pressure Bitcoin’s Continued Dominance
Recent on-chain data reveals that Bitcoin is still favored by large investors, particularly whales. Glassnode data shows that over 90% of Bitcoin’s circulating supply remains in profit, even after recent market corrections.
This suggests the latest dip was not due to widespread panic but rather the liquidation of leveraged positions. Additionally, newer whales who acquired at least 1,000 BTC in the past five months are now holding on to unrealized losses, according to CryptoQuant’s data.
Historically, periods where large holders experience negative unrealized profits often precede market bottoms. While it’s unclear whether the next move will be upward or downward, this growing pressure on whale positions indicates a potential for increased volatility.
As Bitcoin’s price consolidates, the temptation to take profits has grown, with nearly 95% of Bitcoin holders now sitting on gains. Such profit-taking often signals corrections in past market cycles.
Long-dormant wallets are also becoming active again, with large holders who have stayed inactive for years now moving their coins. This shift is a typical sign of a market distribution phase, where early investors may offload portions of their holdings while newer buyers purchase near the highs.
Despite these signs of profit-taking, altcoins are still struggling to break out. Institutional flows into Bitcoin ETFs remain muted, and the broader market’s risk appetite remains subdued. Bitcoin’s dominance continues to rise, reinforcing its position as the leader in the crypto market.
With altcoins failing to regain momentum, the question remains: what’s next for Bitcoin’s reign at the top?
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