Bitfinex analysts predict a potential shift in crypto market dynamics. With bitcoin dominance declining and altcoins showing resilience, they argue that altcoins could outperform bitcoin in the coming months, especially if macroeconomic conditions improve. They discuss the growth of altcoin market capitalization, bitcoin’s declining dominance, and speculative exhaustion in altcoins as key indicators of this trend.

Analysts Expect Altcoins to Dominate by End of 2024

The Bitfinex Alpha report, released on Monday, makes some predictions about the potential performance of the cryptocurrency market, especially regarding altcoins. As bitcoin dominance declines and altcoins show resilience, the report suggests a potential shift in market dynamics.

“As the sell-off took place last week, bitcoin dominance, a measure of BTC’s market capitalization relative to the rest of the cryptocurrency market, fell by 1.3 percent. Meanwhile, the market capitalization of all other crypto assets (excluding the top 10) increased by 4.4 percent,” Bitfinex analysts explained, asserting:

We can say that this shift hints at a potential regime change, where investors are exploring the value of altcoins, as opposed to the usual rush to bitcoin.

Analysts further detailed that altcoin open interest has dropped 55% from its all-time high, signaling a speculative decline and possible seller exhaustion. The ETH/BTC ratio remains below the 365-day simple moving average, indicating ETH’s underperformance since the Consolidation.

Additional reports:

If bitcoin dominance does indeed reach a local top, we could see a period of altcoin outperformance in the coming months, potentially setting the stage for a Q4 rally if macroeconomic pressures ease.

The forecast is reinforced by a 55% drop in altcoin open interest, indicating seller exhaustion. While the ETH/BTC ratio remains below the 365-day simple moving average, highlighting Ethereum’s underperformance, altcoins could still rally. This outlook depends on factors such as falling inflation, improving macroeconomic data, and reduced outflows from bitcoin exchange-traded funds (ETFs).

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