Altcoin Buy/Sell Volume Gap Deepens, Bitcoin Dominates
Over the past 12 months, the cumulative buy/sell spread for cryptocurrencies other than Bitcoin (BTC) and Ethereum (ETH) has fallen sharply to -$36 billion. This is a clear sign that liquidity is being withdrawn from the altcoin market. Despite Bitcoin’s meteoric rise and its break above $100,000, altcoins remain cautious, even fearful. The market still lacks a strong enough inflow to trigger an “altcoin season.”
Weak bid-ask spread reflects lack of investor confidence
The cumulative altcoin buy/sell volume gap over a year has fallen to its lowest level since 2022. This clearly reflects that investors have little confidence in the long-term direction of altcoin projects in the current market context.
Source: CryptoQuant
Despite Bitcoin hitting new highs, altcoins remain in a net sell-off, suggesting that most investors still have a “low-risk” sentiment towards other potential coins. There are no signs of significant capital inflows, leaving the altcoin market’s recovery in doubt, especially as Bitcoin’s price remains the “bottom of the boat.”
BTC.D Surged, Altcoins Quietly Retreat
Under the pressure of sudden concentrated cash flows, Bitcoin's market dominance has climbed to nearly 65%, up more than 1% from mid-June. This clearly shows that investors are pouring capital into this number one safe asset to hedge against risks in the context of global volatility.
Cryptocurrency investment expert David Hernandez from 21Shares commented,
“Bitcoin has firmly established itself above the $100,000 mark, demonstrating its resilience against international political turmoil, proving its adaptability as a number one hedge asset in volatile market scenarios.”
“As confidence in a predicted ‘soft landing’ deviates from initial expectations, and at the same time global money flows diverge, Bitcoin’s scarcity, decentralization, and neutrality make it increasingly attractive to investors amid subtle uncertainty.”
Historically, a rise in the BTC.D ratio has often predicted weakness in altcoins. If this trend does not reverse, even promising projects could be pushed into further stagnation and neglect during this period.
Conditions for the “altseason” boom to return
For alternative cryptocurrencies to regain dominance, a combination of factors will need to happen. First, capital flows into Bitcoin need to slow down or become more stable, allowing money to shift to smaller altcoins.
Next, an increase in risk appetite from retail investors following Bitcoin’s meteoric rise would help open the door to an “altseason.” Finally, a reversal in the 1-year buy/sell volume differential would be needed to signal that capital has begun to circulate.
Typically, “altseason” occurs after Bitcoin has paused or slowed its growth momentum. At this time, investors with high expectations pour money into small projects in search of higher returns. However, at present, there are no clear signs that this trend will happen soon, and the wait must continue.
Until altcoin liquidity improves and the BTC.D ratio falls again, hopes for a bull run in the altcoin market remain limited.
Source: https://tintucbitcoin.com/bitcoin-vung-vang-altcoin-chung-lai/
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