Bitcoin (BTC)'s short to medium-term volatility is emerging again. For the first time since early 2024, long-term holders have begun to release their holdings into the market, weakening Bitcoin's dominance while investment interest in altcoins is sharply increasing.
According to the recent weekly 'Alpha Report' from cryptocurrency exchange Bitfinex, Bitcoin's price structure still maintains a foundation for a bull market, but the overall market is gradually transitioning to a more reactive and sensitive flow. The report diagnosed that "while capital circulation appears to be part of a mature market cycle, Bitcoin may face short-term vulnerabilities if demand declines".
Notably, Bitcoin long-term investors have recently started moving their quantities to exchanges or new wallets to realize profits. This has created a structure where new participants, including institutional investors, ETFs, and individual investors, are absorbing the supplied volume. Bitfinex stated that "this generational change is characteristic of all bull markets", but emphasized that "at this point, whether the strong demand in the spot market can be sustained is the key to determining future direction".
On-chain data shows that the majority of Bitcoin's circulating supply is in profit, which could lead to short-term investor profit-taking pressure. Bitcoin has actually crossed the top 95% range, potentially stimulating selling pressure. While this could lead to a temporary upward trend with volume being redistributed at relatively high prices, it could simultaneously increase structural instability due to high entry prices. Bitfinex warned that "if supply dynamics weaken, there is a possibility of a broad correction following a sharp decline".
Taking advantage of Bitcoin's weak atmosphere, altcoins are showing a notable rebound. Bitfinex described this as an "aggressive altcoin rally", analyzing that investors are seeking additional profits from altcoins. Major altcoins like Ethereum (ETH) and Solana (SOL) are outperforming Bitcoin's returns for the first time since November 2024, and the 'Others Index' composed of assets outside the top 10 market cap has risen at least 35% in the past two weeks, attracting an additional approximately $85 billion.
Simultaneously, Bitcoin's market share has continuously declined for 7 days, reducing by 6.9 percentage points. This is the longest decline since December 2023, with some experts suggesting the possibility of an 'alt season' opening.
The stagnation following Bitcoin's all-time high recapture could be an early signal of structural transformation and capital reallocation. The market's next direction will likely be determined by the intensity of short-term demand, with perspectives crossing that this volume redistribution at the high point could either become a new investment entry point or the prelude to a macro correction.
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