Bitcoin dominance has dropped to around 58%, experiencing its second notable decline in three months, accompanied by a rally of major altcoins. This pattern is similar to May when dominance peaked near 62% and retreated to 59%, but the current decline appears more pronounced as Bitcoin continues to hover around $120,000.
According to The Block on the 21st (local time), the latest dominance change was highlighted by Ethereum's remarkable surge, rising from $2,500 to $3,500 over approximately 10 days.
This rally demonstrates that despite Bitcoin maintaining high price levels and continuing to attract institutional funds through ETF products, the concentrated movement of major altcoins can significantly impact market sentiment.
The broader implications extend beyond individual asset performance, with the total cryptocurrency market capitalization nearly reaching a new all-time high of $4 trillion. Altcoins have benefited from the increased attention Bitcoin has gained, leading investors to explore other coins along the risk curve in an attempt to catch up with Bitcoin's performance.
However, as previously mentioned, the altcoin rally now feels more siloed to individual sectors or coins, considering the dramatic expansion of the available Token world. The number of cryptocurrencies has continued to increase substantially since the beginning of the year, creating an increasingly fragmented environment where investor capital must be distributed across thousands of options. This proliferation suggests that while major altcoins like ETH can benefit from cyclical dynamics, the broader altcoin sector faces fierce competition for attention and liquidity.
The sustainability of these dominance changes will depend on whether major altcoins can maintain momentum through fundamental developments rather than purely speculative capital flows.
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