Traders Anticipate Major Surge in Alternative Cryptocurrencies, According to Coinbase
Market experts are suggesting that the digital currency market could be gearing up for a significant upswing in alternative cryptocurrencies following the inauguration of Donald Trump on Monday. The team at Coinbase observed that the recent decrease in Bitcoin’s dominance led to a surge in alternative cryptocurrency prices.
In their market analysis, the analysts also highlighted that traders are preparing for a resurgence in the altcoin market with the new presidential administration. They stated,
“The decline in Bitcoin’s dominance from 58.5% to 57.3% during the recent relief rally on January 15 indicates that traders might be gearing up for a substantial rally in the altcoin market, supported by positive factors for risky assets and cryptocurrencies.”
Shift in Bitcoin Dominance
Chris Burniske, a partner at Placeholder, a crypto venture capital firm, and former head of crypto at ARK Invest, echoed a similar sentiment, emphasizing the decreasing BTC dominance. He remarked,
“The gradual decline in BTC dominance since late November ’24 could lead to exciting developments in the long tail altcoins – expect fireworks if this trend continues.”
According to Coinbase analysts David Duong and David Han, strong inflows of stablecoins serve as an optimistic indication for a potential upsurge in alternative cryptocurrencies.
They highlighted substantial capital inflows into the market, a significant portion of which flowed towards alternative cryptocurrencies as Bitcoin and Ethereum experienced outflows.
“The increase of $1.3 billion in stablecoin supply last week serves as a clear indicator of capital movement towards these lesser-known assets. This trend has been consistent over the past couple of months, contrasting with the net outflows from US Bitcoin and Ethereum spot ETFs amounting to $457 million and $206 million, respectively.”
Although the outlook appears positive, one indicator, the ETH/BTC ratio, currently doesn’t align with the overall market sentiment. This metric tracks Ethereum’s performance relative to Bitcoin, and had surged during the strong altcoin season in November.
At present, the ratio is at a record low of 0.31. Given its role as an altcoin market gauge, this might not augur well for the anticipated altcoin surge, especially if the November pattern repeats.
Nevertheless, cryptocurrencies like Fartcoin and XRP emerged as the top performers for the week, registering gains of nearly 100% and 30%, respectively. Solana [SOL] also saw an increase of 30%, while Hedera recorded a 22% surge.
It’s interesting to note that both Hedera and XRP were among the standout performers during November’s altcoin rally. The sustainability of their momentum in the current scenario remains to be seen.