However, contrary to expectations during Bitcoin’s recent bull run, altcoins are still suffering, acting as if we’re still in winter. Sure altcoins have blown up, but their total market cap is still over 75% below its all time high. Geopolitical tensions and Bitcoin’s increasing dominance are markers of a world careening towards chaos. These combined conditions are profoundly detrimental for altcoins, squelching any potential for a full-blown altseason anytime soon.
The altcoin market has exploded, reaching more than 17.34 million altcoins as of June. This is an incredible 850 times increase since December 2021. With this incredible growth in place, the altcoin market cap (TOTAL2) is only at $1.13 trillion or 30% below its late 2021 peak. This is an indicator that many more altcoins are currently listed. They have not been able to obtain the market value they used to three decades ago.
Altcoins Suffer Heavier Losses Amid Geopolitical Tensions
Altcoins like Ethereum, Cardano, and others have suffered even steeper declines than Bitcoin during the latest Israel-Iran hostilities. This reality highlights their fragility in times of geopolitical upheaval. With global tensions ramping up, the environment is turning more hostile towards altcoins. Whenever a crisis occurs or we enter a recession, investors often run to predictable, safer assets such as Bitcoin. The disputes rage on with no end in view. This compounding scenario only further creates and compounds headwinds that altcoins have to do even more work to push against.
"Altcoin season almost started… Ethereum outperformed BTC for ~1 week and Israel-Iran war and maybe WW3 started. Now BTC dominance is near a 5-year high, being very far from altseason… Only thing we can do is wait, HOLD and hope. Stay strong everyone" - Gem Hunter
As widely reported, many altcoin investors were deliriously optimistic about an upcoming altseason. Sadly, world events would soon crush their hopes and aspirations.
Bitcoin Dominance Nears 5-Year High
Bitcoin dominance (BTC.D) is through the roof. Indeed, it has regained close to a 5-year high by printing six straight green weekly candles and remaining above 64%. This is a clear sign that Bitcoin is eating altcoins’ lunch, taking a bigger piece of the entire crypto pie. Bitcoin’s dominance is roaring, making an altseason less likely than ever. In the short term, investors can be expected to be focused on Bitcoin.
Sooner or later, this “safety” will leave the stock market and find its way to Bitcoin. They like its stability and established reputation better than the riskier altcoins. Chamber members indicated this preference, which will probably continue as long as there’s uncertainty in the global economic and political environment.
Negative Buy/Sell Volume Difference for Altcoins
Almost everywhere, altcoins are witnessing a severe reduction in trading volume. This is evident in the fact that total sell quote volume has outpaced buy quote volume by $36 billion in the last year. When looking at the negative buy/sell volume difference, that picture becomes pretty hard to overlook. There are greater sellers of these assets than buyers of them. This trend further affirms the notion that altcoins are indeed still in a winter season. Demand is still weak and prices are still under negative price pressure.
"Even though Bitcoin is enjoying a bull run, altcoins are behaving like it’s still winter. Unless this metric starts rising again, expecting a full-blown altseason or altcoin FOMO might just be wishful thinking" - Burakkesmeci
This quote perfectly sums up the altcoin market right now, the contrast between Bitcoin’s new all-time highs and altcoins’ crash and burn.
