Altcoins are struggling under increasing pressure from Bitcoin.
Could a new altseason reverse the trend from Bitcoin to altcoins?
June has long been noted as the time when Bitcoin [BTC] affirms its dominant position, and this year is no exception. The BTC.D index has surpassed 65%, marking a new peak in the cycle.
However, this year, geopolitical tensions have created a new variable. Typically, investors would pour capital into speculative assets to take advantage of short-term volatility. Yet BTC.D has risen.
Is this a turning point for the market? As macro concerns further solidify Bitcoin's role as a 'safe haven', which once belonged to altcoins?
The altseason index declines as capital flows converge into Bitcoin.
To understand the relationship between Bitcoin and altcoin, one needs to look back at the previous context.
In the 2022 bear market, consecutive shocks led to BTC plummeting, causing it to lose 65% of its value over the year and ending the cycle at $16,531.
Interestingly, in Q2 of that year, Ethereum [ETH] outperformed Bitcoin. ETH attracted flowing capital and made a breakthrough in mid-August, surpassing BTC during that period.
In summary, macroeconomic difficulties, from the Fed's aggressive interest rate hikes to the collapse of LUNA/UST, have driven investors to seek risk-hedging tools in alternative assets, allowing altcoins like Ethereum to shine briefly.
But after three years, the situation has changed.
The altseason index is at its lowest in two years, altcoins are suffering double-digit monthly losses, while Bitcoin dominance has risen to its highest level in four years – all occurring amidst ongoing macro pressures.
Source: TradingView (BTC/USDT)
Where does the change come from? It's the rise of institutional capital flows.
Large investors currently dominate market cash flows. The preference for BTC, both as a macro hedge and a liquidity anchor, keeps its dominance ratio high.
Retail investors are also starting to recognize this. As Bitcoin demonstrates strong capital resilience, many choose to 'park capital' in BTC for long-term stability rather than chase high-risk altcoins for immediate returns.
Therefore, as the market remains volatile and macro risks persist, the capital shift towards altcoins may have to stay on the sidelines for a while longer.
Altseason version 2.0 – Built on a foundation of real utility.
The market may be preparing to enter a new form of altseason, not based on 'hype effects' but on real utility. Strong Layer 1s like Ethereum, Solana [SOL], and XRP may lead the way.
These networks are not only competing with Bitcoin. They are building the foundation for a new digital economy, leading trends such as real-world assets (RWA), decentralized infrastructure (DePIN), and stablecoins.
RLUSD – the new stablecoin from XRP is a prime example. It has entered the top 20 with a market cap of $428 million, tapping into the vast $256 billion stablecoin market.
Source: CoinMarketCap
However, for altseason to truly explode, the market still needs a new, strong catalyst, similar to the previous boom of NFTs or memecoins. But market behavior trends are clearly shifting.
Bitcoin's dominance, heavily influenced by institutional capital flows, shows no signs of weakening. Yet beneath the surface, altcoins are shifting towards practical applications. This transition could be the factor that changes the market narrative favorably for altcoins in the future.
Source: https://tintucbitcoin.com/anh-huong-macro-fud-va-co-hoi-altcoin/
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