Brief Bitcoin Lull Sees Micro Alts Season

Institutions are waking up to the idea that there might be outsized returns available in select altcoins.

Dominance has dropped 2%, but is it the sign of further interest to come?

All the action has been centered around bitcoin in recent weeks, as anticipation of a spot BTC ETF being approved drives money into the largest crypto asset. Although alts may have gained in dollar terms, they have typically lost against their BTC pair. The evidence of this has been in the increasing Bitcoin Dominance, as BTC makes up an increasing percentage of the total crypto market cap.

Bitcoin Dominance chart (TradingView)
BTC Dominance is at its highest since April 2021.

Bitcoin Dominance is at its highest for over two and a half years. Over the last three weeks, though, it has pulled back. Only by 2%, but that has still been enough to see a significant amount of money move back into altcoins.

Over the last week, the total market cap of all crypto assets has broken above a key level. This is as good an indication as any that alts are seeing signs of life once more.

It's too early to call it Alts Season: When alts see significant and consistent gains over a longer period, strongly outperforming BTC. That usually happens towards the end of a big move for bitcoin, when profits rotate back out to underpriced coins that have been overlooked for months. Still, though, it's an interesting development. Dominance has hit a support level, and this could be just a blip on the road to higher figures still—potentially even with 60% coming into play.

But it could also be a signal that alts are going to start holding their own.

ETH ETF Changes The Game

The news that BlackRock wants to launch a spot ETH ETF prompted renewed interest in the second-largest crypto. Traders realized that institutional money wasn't going to be confined to bitcoin, and that there might be opportunities in smaller-cap coins—which, due to their relative size and lower liquidity, offer outsized returns.

Solana (SOL), too, has seen exceptional strength recently, rallying from a low of $8 in December 2022 to a high of $64 last week, an 800% move. It has more than tripled in price in the last two months. Grayscale's Solana Trust has seen huge activity, and is trading at an incredible 8x premium to the underlying market.

The Everything (Crypto) Rally?

Bitcoin is the big dog, and probably always will be. That's where the largest investors, institutions, and even nation states will be parking the bulk of the cash they allocate to crypto.

But the institutional market is waking up to the idea that there might be more to crypto than bitcoin. At a time when asset managers are salivating about the prospect of the kinds of returns BTC can provide in these markets, those with even higher risk tolerance are zooming out and thinking what they could achieve if they cast their net a little wider.

And that raises the possibility that the developing bull market could be about much more than Bitcoin.

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