Alt Season Arrives Only When Bitcoin Dominance Falls…When is the Turning Point?

▲ Bitcoin, Altcoin ©

The Bitcoin-centric market is getting stronger…Despite instances of altcoin surges, market funds are still flocking to Bitcoin.

According to CoinMarketCap, a cryptocurrency market aggregation site, on May 5 (local time), the Altcoin Season Index recorded 38/100, still remaining in the 'Bitcoin Season' phase. During the same period, Bitcoin (BTC) dominance rose by 0.2 percentage points over 24 hours to 60.56%, indicating that market funds are concentrated in Bitcoin.

The overall market showed an upward trend, but the center of the flow was clear. The total cryptocurrency market cap expanded by 1.59% to $2.69 trillion, and trading volume surged by 107.85%, but Bitcoin absorbed most of the liquidity by rising to the $81,700 level. Investor sentiment also remained at a neutral level with a Fear & Greed Index of 50, far from an overheated phase.

Some altcoins showed strong gains, but this remained a limited phenomenon. Following the announcement by Telegram founder Pavel Durov, Toncoin (TON) surged by 30%, DOGS by 69%, and NOT by 16%, showing surges centered around specific ecosystems. However, this was closer to a 'sector-specific rally' that did not spread across the entire market.

As a result, the current market still exhibits risk-averse tendencies, with investors continuing to prefer relatively stable Bitcoin over volatile altcoins. For altcoins to truly outperform Bitcoin, a structural shift is needed, with the Altcoin Season Index rising above 75.

The key observation point going forward is the direction of Bitcoin dominance. Only when dominance declines and funds begin to shift to altcoins can a full-fledged altcoin market begin. Currently, while there is a possibility of some theme-centric rallies continuing, it is assessed that the conditions are not yet sufficient for it to spread into an 'Alt Season' that lifts the entire market.

*Disclaimer: This article is for investment reference only and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*