Bitcoin Dominance Hits 3-Year High, But Why Are Altcoins Still Struggling?

Bitcoin’s dominance in the crypto market has surged to 58.8%, up from 51% in December, reaching its highest level since early 2021. This means Bitcoin is tightening its grip. Normally, when Bitcoin stabilizes after a rally, altcoins take the spotlight as investors look for bigger returns. But this time, that shift isn’t happening.

So, what’s keeping altcoins from their usual breakout? And will Bitcoin’s dominance continue to grow, or is a turning point ahead? Let’s break it down.

Why Has Altcoin Season Not Arrived Yet?

Many investors have been waiting for an altcoin season, a period when altcoins see massive gains, typically following a Bitcoin rally. Usually, when Bitcoin stabilizes after a strong surge, traders take profits and move their funds into riskier altcoins with higher potential returns. However, even though conditions for an alt season – such as Bitcoin stability, increased market liquidity, and growing institutional interest – are present, the shift has not happened as expected.

Why Bitcoin’s Dominance Keeps Rising

Several key factors are driving Bitcoin’s growing dominance:

• Institutional buying – Companies like Strategy continue to accumulate Bitcoin, keeping buying pressure high.
• Market dilution – The launch of many new tokens is spreading investor interest across a wider range of cryptocurrencies instead of concentrating on established altcoins.
• Spot Bitcoin ETFs – The introduction of spot Bitcoin ETFs has made it easier for traditional investors to buy Bitcoin, while most altcoins do not have the same level of accessibility.

When Ethereum ETFs were approved last year, many expected them to reduce Bitcoin’s dominance. While these ETFs attracted strong initial interest, they failed to drive a broader altcoin rally. This suggests that an alt season may still be coming, just later than anticipated.

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Could a Big Altcoin Breakout Be Near?

Well-known crypto analyst Rekt Capital has sparked fresh optimism for an upcoming altcoin rally. He pointed to a key technical signal, saying that if the total altcoin market cap closes above a certain level this week, it could trigger a major breakout.

Earlier this month, the altcoin market cap briefly dropped below $200 billion dollars after a sharp crash but later recovered. It has since climbed to around $249 billion dollars. Rekt Capital highlighted that a weekly close above $250 billion dollars could confirm a turning point for altcoins.

Key Levels to Watch

If altcoins break past the $250 billion dollar mark, analysts expect a rally to $315 billion dollars, signaling that the market has bottomed out. However, to reach the December 2024 high of $451 billion dollars, much more growth will be needed.

The crypto market is at a crucial stage. If altcoins gain momentum, it could finally signal the long-awaited shift investors have been hoping for.

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