- Bitcoin dominates the cryptocurrency market 60.6% of the time
- Its dominance and rising price leave a mouthful of altcoins behind
- Most of the liquidity that enters the market is taken up by Bitcoin
- U.S. election strengthens Bitcoin, raising questions about altcoin growth
Bitcoin’s rise, especially with the U.S. election, is taking away liquidity from the crypto market, slowing the growth of altcoins. This is being experienced by the top altcoins and even more by others, creating questions as to whether we should expect an altcoin rally after the election.
More on the Altcoin Struggling
Bitcoin is showing increasing dominance in the crypto market, taking up most of the liquidity and reaching a record 60.6%. It is also showing more stability during the downswings, at least when BTC fell less than 4% from its near-record high last week – large-cap altcoins like ETH and SOL fell nearly 10% from their recent highs.
Bitfinex analysts said:
“Altcoins are now seeing severe drawdowns whenever BTC pulls back. With BTC absorbing most of the capital flow into crypto assets, altcoins are struggling to keep up, and without a fresh catalyst, their prospects for a comeback in the near-term appear slim”
They added:
“We believe that the altcoin market may experience further declines relative to bitcoin in the mid-term, primarily due to the apathy of speculators.”
The U.S. election also dramatically affects the crypto market, as a win for one candidate or another could greatly influence decisions on upcoming regulations. However, altcoins are more dependent here too, according to K33 Research:
“Bitcoin’s attributes and wide availability position it to thrive in the medium term, regardless of the U.S. election outcome. For altcoins, the election is more sensitive. This implies that the medium-term path dependency in alts should be more sensitive to the election than BTC.”
Conclusion
Just recently, we talked about how inconsistent the market can seemingly behave under the dynamics of Bitcoin and Ethereum, but against the backdrop of individual altcoins exploding.
And yet, we’re seeing Bitcoin take away the majority of the market, and the long-awaited altcoin season is increasingly in question.
However, as we pointed out earlier, the dynamics are very intense, and we need to remain very attentive to the indicators ahead of us. Stay tuned.
