Written by Shogun Saski
Translation: Blockchain in Vernacular
Recent cryptocurrency market trends suggest that altcoins may be becoming more resilient, showing a shift in how investors protect their money during uncertain times. The trend challenges Bitcoin’s long-standing dominance as the primary store of value during market downturns.
According to a report published on September 9 by analysts at cryptocurrency trading platform Bitfinex, there are growing signs that the crypto market may be experiencing a "potential shift in the landscape." Investors appear to be reevaluating their strategies, increasingly viewing altcoins as valuable alternatives. This shift is a clear deviation from the typical response of investors flocking to Bitcoin during previous bear market phases.
Analysts at Bitfinex noted that while Bitcoin prices experienced significant declines in early September — falling as much as 10.8% to $52,827 on September 7 — altcoins have shown surprising resilience. While the price of Bitcoin has since recovered slightly to $57,001, it has still not breached the key $60,000 mark it has held since August 30.
Meanwhile, Bitcoin’s dominance of the entire crypto market is also slipping. According to CoinMarketCap, Bitcoin’s market share has fallen by 1.3%, while the total market capitalization of cryptocurrencies outside the top 10 has risen by 4.4%. This change in market dynamics reflects that even as Bitcoin is still struggling to recover, investors’ interest in altcoins is growing.
Bitcoin Price Chart
According to TradingView data, Bitcoin's current market dominance is 57.33%, down slightly from last week. Although still at a relatively high level, this figure is gradually approaching the 60% critical threshold considered by analysts such as Into The CryptoVerse founder Benjamin Cowen. Cowen said that Bitcoin's dominance rate approaching 60% may mean its "last wave", marking the peak of the market and prompting investors to turn to altcoins for diversified investment.
For many traders, Bitcoin’s dominance rate is an important indicator of market sentiment. When Bitcoin’s market share reaches highs, it is often seen as a signal to move into other assets, including altcoins, which tend to outperform in such situations. Interestingly, Bitcoin’s dominance rate has fallen by 0.53% over the past month, further fueling speculation that the altcoin market may be about to see a rebound.
Meanwhile, total open interest (OI) for altcoins, the total number of all unsettled derivatives contracts, has fallen 55% from its all-time high. Analysts at Bitfinex interpreted the drop as a sign of reduced speculative activity and possible seller exhaustion. With fewer traders speculating on altcoins, the market may be entering a more sustainable growth phase.
Several prominent traders have expressed similar views, arguing that a reduction in speculative trading could strengthen the altcoin market. For example, a crypto trader who goes by the pseudonym Emperor commented on September 10 that the decline in open interest combined with the relative stability of altcoins during the Bitcoin price decline indicates that altcoins are accumulating sustained momentum.
“Altcoins have shown strong resilience in the recent correction, and as the rebound is driven by low speculative interest, it is clear that their position in the market is solidifying,” Emperor explained. He also predicted that certain altcoins may continue to outperform Bitcoin regardless of the market direction, and even suggested that the next parabolic rise phase of altcoins may be imminent.
Other traders, such as 360trader, have expressed similar optimism, noting that the altcoin market cap is showing a "very bullish" trend. MN Trading founder Michael van de Poppe went a step further, calling the current altcoin market a critical "accumulation phase." According to van de Poppe, this "dull state" is likely a precursor to the next leg up, and patient investors are preparing for the next wave in the altcoin cycle.
In summary, while Bitcoin’s dominance has historically been viewed as a barometer of crypto market strength, the recent resilience of altcoins suggests that investors are beginning to explore new investment strategies. As the market matures, this growing focus on altcoins could signal a broad shift in investor behavior and lay the groundwork for an upcoming altcoin boom.
