Market Sentiment Shift: Altcoin Sector Faces Uncertainty in Wake of Bitcoin Dominance

Is the Altcoin Party Over? Bitcoin Dominance Threatens Alt Sector!

The recent correction in Bitcoin’s (BTC) price has led to a significant sell-off in the altcoin market. As a result, many altcoins have plummeted by 10% to 30%, with some top and mid-cap coins even shedding over 20%. This drastic decline in value has raised concerns about whether the altcoin party is indeed over.

According to on-chain analyst Joao Wedson, founder of Alphractal, it’s time for investors to reassess their portfolios. Wedson argues that Bitcoin’s dominance has marked a bottom above 54% and could strengthen further in the next few weeks and months, which would be devastating news for altcoins.

The data suggests that there is an uptick in Bitcoin vs altcoin positioning, with capital flowing from altcoins to BTC and stablecoins. This shift in market sentiment is not favorable for the altcoin sector.

Furthermore, the 90-day change in Bitcoin’s dominance has turned positive for the first time since November’s wild altcoin rally, making things even more dire for altcoins. Wedson warns that this could lead to a prolonged bearish trend for the next few weeks and months.

The Altcoin Season Index has dropped to a monthly low of 50%, indicating a significant decline in the overall performance of the altcoin sector. This downturn has not been isolated, as many top and mid-cap altcoins have followed suit.

While some may be holding onto hope for a Santa rally that could boost altcoin prospects, the current data paints a grim picture for the sector. Ethereum (ETH), on the other hand, held up relatively better, falling only 6% but still managing to defend $3.5K as support.

It’s worth noting that some outliers like Hyperliquid (HYPE) and Pudgy Penguins (PENGU) have bucked the trend, with HYPE rallying by 40% and PENGU surging an astonishing 425%.

Source: ambcrypto.com