Speculation about the potential explosion of altcoins continues, especially as investors trade more cautiously and selectively. However, new data indicates that the current trend still favors Bitcoin as the main destination for the market.
Faint hopes for altcoins
The latest analysis from Matrixport raises questions about the potential for altcoins to record a strong rally as Bitcoin remains the only reliable asset in the current market. The report indicates that for altcoins to grow, Bitcoin's dominance must decline significantly.
However, the current market conditions do not support this. Retail investor participation is decreasing, and speculative activity in the futures market has nearly bottomed out, indicating that most of the market has little demand for any risky assets other than Bitcoin.
Demand is primarily focused on buying spot Bitcoin rather than trading with leverage. Although Bitcoin's price increase is happening slowly, BTC is still considered the safest trading asset, especially as analysts forecast an accumulation phase in the summer, similar to last year's price behavior.
Cautious optimism amid concerns about June
Historical data shows that June is often a month of high volatility and disappointing results for Bitcoin. With an average return of only 1.9% and a 50% chance of profitability, the performance of the 'king of coins' in June is far inferior to explosive periods like October. Last year's patterns serve as a reminder of the risks when Bitcoin fell over 7% in June, only recovering 3.1% in July and declining another 8.7% in August.
This seasonal weakness has reappeared in recent price action, consistent with the cautious attitude of many investors at the beginning of the month. As historical patterns influence market sentiment, traders are preparing for a less vibrant trading period in mid-summer.
Currently, the Cryptocurrency Fear and Greed Index is at 57, indicating sentiment is in the 'Neutral' zone. According to data from Reflexivity Research, this marks a shift from previous weeks when market sentiment frequently resided in the 'Greedy' zone. Traders today appear more cautious as both strong optimism and panic sentiment fail to dominate trading activity.
The decline from last month's score of 75 indicates that overall optimism has weakened, possibly due to the market being in a consolidation phase and mixed signals. In other words, investors seem to be in a waiting state, expecting a clearer trend to emerge soon.
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