Altcoins struggle as BTC dominance remains high in the possibly last bear market lap
- Altcoin performance has been underwhelming with notable exceptions as BTC dominance remains above 50%.
- Altcoins' low interest could suggest the last phase of a bear market cycle.
- Bitcoin's breakthrough at the $32k level is also pivotal to trigger a move to $40k, according to analysts.
Bitcoin's dominance, which has reached the highest level in 2023, above 52%, is signalling a challenging phase for altcoins. While most altcoins are struggling to gain momentum, some analysts believe that this might be the leg of the bear cycle if history repeats.
Altcoins against 52% Bitcoin dominance
Bitcoin's market cap relative to the total cryptocurrency markethas been on the rise. Over the past six months, Bitcoin's dominance has fluctuated within the range of 47% to 52%. Over the previous week, Bitcoin maintained a dominance level exceeding 50%, adding to the altcoin market struggle.
On Friday, Bitcoin briefly surged above the crucial $30,000 mark. This led to gains in the global cryptocurrency market cap, but altcoins gains largely remained subdued with a few notable exceptions.
Most altcoins have been underperforming, except cryptos like Solana, XRP, Bitcoin SV, Stacks and Injective. These have all managed to register double-digit gains in the last seven days, based on CoinGecko data.
Most #altcoins continue to underwhelm, while a few select projects continue giving traders just enough motivation to swap assets. $SOL (+5%), $BSV (+5%), and $INJ (+6%) are a few notables growing in market cap, while $BTC continues its rising ratio of market cap vs. the field. pic.twitter.com/K0GJuyAedF
— Santiment (@santimentfeed) October 19, 2023
The last leg of bear market
The ongoing subdued interest in altcoins may suggest that the cryptocurrency market is entering the final phase of a bear cycle. As noted by crypto trader Michaël van de Poppe, the sentiment surrounding altcoins has waned, and interest in alts only peaks when market confidence improves.
Van de Poppe said, "A few months prior of the Bitcoin halving, that was the altcoin bottom."
With the next Bitcoin halving event scheduled for April 2024, Van de Poppe recommends considering strategic allocations in this subdued market.
Meanwhile, crypto analyst Altcoin Sherpa underlined the importance of Bitcoin breaking through the $32,000 level. He noted,"Break 32k, we go to 40k, if this recent high was it, we're going to low 20ks IMO."
At the time of writing, Bitcoin (BTC) is priced at $29,488, having recently ventured beyond $30,000 on Friday. Based on CoinGecko data, BTC is boasting close to 4% gains in the 24-hour frame and a 10% surge over the past week.
Bitcoin's elevated dominance is creating a challenge for altcoin prices. However, some analysts say the cryptocurrency market may be approaching the final stretch of the bear market cycle, with Bitcoin leading the way ahead of the halving in 2024. However, investors should carefully approach this alleged final leg of allocation in the bear market.
Author
Shraddha Sharma
FXStreet
With an educational background in Investment Banking and Finance, Shraddha has about four years of experience as a financial journalist, covering business, markets, and cryptocurrencies.
