Bitcoin’s dominance is currently 64.8% compared to 2017 when the dominance was over 68%. The current crypto market capitalization is well distributed across top altcoins and stablecoins. After the price increases in the current market cycle, almost 100% of the crypto wallet addresses are profitable. However, the same does not apply to altcoins with lower market capitalization. Many altcoins continue to refute the months of Bitcoin’s dominance and the final hour has been a sea of green for most cryptocurrencies.
There are many projects showing signs of whale gathering after nearly three years of crypto winter. XRP missed the 2018 mark by almost 75% and after encountering regulatory challenges, the altcoin may find it harder to recover. In contrast to XRP, projects such as ADA, LINK and DOT recorded double-digit growth. Ethereum, Synthetix, Yield Farming, Uniswap and Compound have seen a remarkable accumulation on the exchanges. Historically, the bitcoin rally has resulted in an alt season as investments flow into bitcoin. However, this is the current Bitcoin diagram signals that the supply of Bitcoin is being withdrawn from the exchanges at a rapid pace. Bitcoin bull cycles are known to end after the supply liquidity shift. As soon as it becomes positive, the price trend can be reversed.
Ethereum’s rally would be crucial for altcoins to hit pre-2018 levels. And the key to the Ethereum rally is the success and TVL of the top defi projects. Most altcoins have hit a new ATH, but those with small caps have yet to recover and the burning question is whether that will happen and if so, when. Whenever the alt season kicks off, it will impact both institutional and retail investment flows in Bitcoin. This, in turn, could affect the ongoing Bitcoin price rally and stop it in the short term.
In the past six months, the price of Bitcoin hit a new ATH of $ 41,000 and Ethereum hit a new ATH. The investment flowed into several altcoins in the top 25, based on data from CoinMarketCap. Despite these two cases, Monero, Zcash and Dash failed to make the rally. Ontology, a token that hit a high of $ 8.7 in the previous bull run, is currently trading at $ 0.61 and there is less wiggle room for the token to regain its lost market cap. Monero is another in a long list of altcoins with the same fate during the current market cycle. For most altcoins, regaining lost market cap or getting back to 2017 levels can be a challenge.