Analysts said altcoins remained relatively strong despite Bitcoin’s recent decline, suggesting investors are adjusting how they protect their capital amid market uncertainty.
“This shift suggests a potential regime shift as investors look to altcoins for value, away from the typical pattern of piling into Bitcoin during a recession,” analysts at cryptocurrency exchange Bitfinex wrote in a Sept. 9 report.
“Altcoin markets have shown resilience,” he added.
Analysts have noted the recent price decline of Bitcoin (BTC), which fell to $52,827 on September 7, down 10.8% from seven days ago, according to CoinMarketCap data.
Bitcoin has since recovered slightly to $57,001, but remains below the key $60,000 level it hasn’t reached since August 30.
Bitcoin is up 0.65% over the past 7 days. Source: CoinMarketCap
They noted that amid the Bitcoin price decline, Bitcoin’s dominance (a measure of cryptocurrency market share) fell by 1.3%. However, the market cap of all cryptocurrencies outside the top 10 increased by 4.4%.
According to TradingView data, Bitcoin’s dominance is at 57.33% at the time of publication, down 0.50% from last week. That’s not far from the 60% level, and Benjamin Cowen, founder of Into The CryptoVerse, sees this level as the “last ditch effort” for Bitcoin dominance.
Traders often look for signs that Bitcoin’s dominance is reaching its peak and sell Bitcoin and move capital into alternative assets such as altcoins.
Bitcoin dominance has fallen by 0.53% over the past month. Source: TradingView
Meanwhile, total altcoin open interest (OI), which measures the total number of contracts that have not been filled or settled by delivery, has fallen 55% from its all-time high, which Bitfinex analysts argue represents “speculative disinterest and potential fatigue among sellers.”
Several traders agreed that the decline in speculative bets on altcoins suggests that the market is strengthening.
relevant: Trader says altcoins reach ‘sell your house’ levels amid flashing buy signals
“The strength shown by altcoins in the recent correction and the bounce back from the relatively low open interest pump is a sign of continued strength,” Emperor, an anonymous cryptocurrency trader, wrote in a September 10 post on X.
“It is very likely that the selected altcoins will outperform Bitcoin in both downside and upside. The parabolic altcoin phase of the cycle is close. Very close,” the emperor added.
Meanwhile, 360trader said that altcoin market cap is “looking very bullish.”
MN Trading founder Michael van de Poppe believes this is a buying opportunity for altcoins.
“Boring is the accumulation period before a new push occurs. That’s the current state of the altcoin market,” van de Poppe wrote on September 10.
magazine: Crypto whales like Humpy are gamifying DAO voting, but there’s a solution.
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.