Is the altcoin frenzy over? Bitcoin's dominance threatens the altcoin space!

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After a pullback in Bitcoin [BTC], the recent market has seen sell-offs, with altcoins experiencing significant discounts.

These discounts have led some analysts to call for 'buying the dip'. However, on-chain analyst and Alphractal founder Joao Wedson has issued a warning to altcoin traders. He stated,

Wedson noted that the holdings of Bitcoin relative to altcoins have increased, indicating that more funds are flowing from altcoins to BTC and stablecoins.

Wedson stated that BTC's dominance has bottomed out above 54% and may strengthen further in the coming weeks and months. He predicts that this scenario is 'terrifying for altcoins'.

He added that since the crazy rise of altcoins in November, BTC dominance's 90-day change has turned positive for the first time, further exacerbating the situation for altcoins.

In short, the altcoin sector may not strongly rebound from the recent adjustments. In the past week, most top and mid-cap altcoins have fallen by 10%-30%.

Among the top altcoins, Ripple [XRP] and Cardano [ADA] have seen significant declines. XRP fell nearly 10% but remains above $2. In contrast, ADA dropped 18% during the same period, falling below $1.

Interestingly, Ethereum [ETH] performed much better, only declining by 6%, but holding the support level at $35,000.

However, other outliers like Hyperliquid [HYPE] and Pudgy Penguins [PENGU] rose by 40% and 425% respectively.

Despite this, the overall performance of the altcoin industry has further slowed down, with the altcoin season index dropping to a monthly low of 50%.

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