Glassnode data indicated that Bitcoin’s dominance increased after the FTX collapse in 2022. The analytics firm highlighted that more investors chose Bitcoin as an investment tool over other digital assets.
According to Glassnode, a Blockchain analytics firm, Bitcoin’s dominance has surged in the past three years. The firm noted more capital rotation into Bitcoin than other digital assets, such as altcoins.
Glassnode data revealed Bitcoin dominance surged from 38% to 58% since FTX’s collapse in late 2022. According to the analytics firm, since the 2022 low, Bitcoin’s market cap has grown 5.3x from $363 billion to $1.9 trillion. Glassnode noted the surge outpaced altcoins, whose market cap increased by 4.7x to $892 billion.
Glassnode noted that despite the divergence, BTC and altcoins remained highly correlated. The firm suggested that the key drivers of the market caps may not be the growth rate differences but more substantial relative inflows into BTC. The firm suggested that a reversal in BTC dominance could signal capital rotation back into altcoins, which could trigger an alt season.
Onchain data revealed that the BTC cycle in December 2024 remained more stable than previous ones. The data showed that realized losses during market pullbacks remained minor, and volatility in the bull market remained lower. The cycle is reportedly attributed to a more knowledgeable investor base, especially among retail holders who now accumulate during market corrections rather than panic selling at the top.
In an earlier report, Glassnoderevealed that Bitcoin had become a store of value and a medium of exchange. The firm noted that BTC’s net capital inflow exceeded $850 billion, and its daily economic volume was approximately $9 billion.
The firm noted that Bitcoin’s dominance stabilized amid macroeconomic developments such as Trump’s pro-crypto policies and the US’s discussions of having Bitcoin as a potential strategic currency reserve. Glassnode suggested that Bitcoin’s dominance and market reaction reflected its role as a 24/7 global asset that investors turn to in response to economic developments.
On the other hand, Altcoins have not shown any sign of recovery, especially after Donald Trump imposed tariffs on China, Canada, and Mexico earlier this week. The tariffs triggered sell-offs across global markets that saw altcoin’s market cap plunge. According to Coinmarketcap, on Feb 3, the total altcoin market cap stood at $1 trillion, a 31.5% decline since the end of January.
Altcoins continue to underperform amid BTC dominance
Glassnode creators Jan Happel and Yann Alleman warned late last year that the altcoin season might have ended abruptly. They noted that Bitcoin dominance was rising while altcoins were losing critical support.
Analyst Rekt Capital hinted that an altcoin comeback should eventually occur. The analyst added that the altseason would only come after Bitcoin dominance gains at least another 16% from current levels.
“If history repeats, the real Altseason everybody is waiting for would begin once Bitcoin Dominance rejects from 71% (red).”
–Rekt Capital
Trading resource Stockmoney Lizards commented on altcoin’s poor performance. It highlighted several factors that could have contributed to the underperformance. Among the mentioned factors included the market’s still-in-the-post-halving Bitcoin Euphoria phase. Stockmoney Lizard added that the euphoria was fueled by ETF buying and Trump’s pro-crypto stance.
In its analysis, Stockmoney Lizard mentioned that Ether’s breakout was a prerequisite for browser altcoin market correction. The crypto community also expressed its sentiments on a possible altseason. According to trader Kaleo, BTC’s dominance in the market peaked, indicating a shift in momentum towards altcoins.
The trader noted that Bitcoin dominance surged during the last bull run and suggested that altcoins may begin outperforming soon. Kaleo also noted altcoins such as PEPE had hit their market lows, hinting at potential rebounds. Crypto analyst Ted Pillows also highlighted various patterns in the altcoin market that resemble previous bullish cycles, suggesting a looming altseason.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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By Nermeen Nabil Khear 