The cryptocurrency market has a significant rally last week, which gave many speculators a much-needed boost to make profits in the short term. Bitcoin led the chargeand crossed the $64,790 mark, although the momentum appears to have waned at the time of writing this article.
This peak was reflected on the altcoin landscape, with several cryptocurrencies including TRON, Avalanche (AVAX), and Chainlink (LINK) posting impressive gains of 20% to 30% in just seven days.
Despite these gains among widely held altcoins, Bitcoin remains dominant across the market.
Bitcoin’s Dominance Rises: What Does This Mean for Altcoins?
The altcoin season has yet to build up steam since the start of the year as Bitcoin continues to command the lion’s share of investor attention. This is clearly reflected in the Altcoin Season Index, which currently registers a reading of 22, tipping the scales in Bitcoin’s favor. The scales also read 29 on the Altcoin Monthly Index, also in Bitcoin’s favor.
Essentially, the index works by analyzing the performance of different altcoins against Bitcoin. If 75% of the top 50 altcoins outperform Bitcoin over the past 90 days, it’s altcoin season. If 75% of the top 50 altcoins outperform Bitcoin over the past 90 days, it’s considered an altcoin month. Interestingly, the last official altcoin season occurred during the 2021 bull run.
According to the graph belowThe last time market dominance came close to tipping in altcoins’ favor was in January 2024, when it climbed above 75 for just a few days. These days, the scale usually hovers around the 20s to 30s, putting altcoin season further out of reach. In fact, the index even dropped as low as 12 on July 30, further highlighting Bitcoin’s continued dominance.
This Bitcoin dominance trend is supported by price data from CoinMarketCap. At the time of writing, Bitcoin is trading at $63,850 with a market cap of $1.26 trillion. This represents a 6.92% increase over the past seven days. As such, 56.3% of the entire crypto market cap is currently held by Bitcoin.
What is the performance outlook for altcoins?
Due to Bitcoin’s dominance, many altcoins now tend to mirror its performance. However, there are periods of exceptions where some altcoins independently experience notable rallies. At the time of writing, Ethereum has the largest share of the altcoin market cap at $314.2 billion. Other altcoins collectively have a market cap of $438.48 billion, while stablecoins have a market cap of $161.97 billion.
The most impressive gains currently go to Sun Token, a stablecoin swap token based on TRON, which is up 305% in seven days. Memecoins Dogwifhat (WIF) and POPCAT are also up 32.7% and 76% respectively in the same time frame.
There is no doubt that altcoins will show mixed performance in the future depending on their individual usability and market acceptance.
Main image from Pexels, chart from TradingView