Bitcoin’s grip on the crypto market is tightening once more, and the numbers behind that shift assist clarify why a broad basket of altcoins is unlikely to beat the highest crypto.
Information from CoinMarketCap point out that Bitcoin’s dominance is edging upwards in the direction of 60% of the overall crypto market capitalization. Compared, altcoins’ dominance has been trending downwards within the present market cycle.
On the similar time, the Altcoin Season Index reads 41, indicating a Bitcoin-led market fairly than the broad rotation that sometimes lifts most tokens concurrently. The numbers have remained under the 75-plus threshold that sometimes indicators a broad-based rotation into smaller property since final September
This means that whereas retail merchants favor rotating Bitcoin income into speculative tokens, they’ve needed to cope with a bear market that has not afforded any asset the chance to shine.
In mild of this, there was little give attention to altcoins. As a substitute, the market has been characterised by a distinct cycle the place as we speak’s marginal patrons don’t spend money on obscure tokens as a result of they’re solely all in favour of Bitcoin’s distinctive traits.
Institutional flows favor liquidity and security
Essentially the most important shift in cryptocurrency because the final basic altcoin season is the speedy development of regulated infrastructure and institutional entry factors.
Bitcoin now has mainstream distribution mechanisms, comparable to spot exchange-traded funds and institutional custody merchandise, designed for giant allocators. These allocators prioritize deep liquidity, minimal slippage, and safety from headline danger.
Massive capital allocators not often deploy a scattered technique throughout dozens of tokens. As a substitute, they buy what clears their inside danger committees.
This often means choosing the asset with the longest historical past, the deepest liquidity, and the clearest market positioning.
Even when institutional traders search publicity to the broader cryptocurrency market, they sometimes start with Bitcoin and develop solely later.
Latest fund circulation information illustrates a robust bias towards high quality over speculative altcoins.
In accordance with CoinShares weekly report, cryptocurrency funding merchandise logged a fourth consecutive week of outflows. These outflows totaled $3.74 billion over 4 weeks, together with $173 million within the newest week alone.
Bitcoin and Ethereum had been the first sources of those redemptions, with losses of $133 million and $85.1 million, respectively.
Concurrently, a handful of main various tokens noticed inflows, with XRP gaining $33.4 million and Solana including $31 million.
This selective circulation signifies that traders are usually not chasing a broad altcoin rally. They’re selecting just a few liquid names whereas remaining extremely defensive.
A historic imbalance in provide and demand
Altcoins face important headwinds as a result of an unprecedented mixture of intense promoting strain and substantial token dilution.
Information from CryptoQuant point out that the cumulative buy-and-sell distinction for altcoins (excluding Bitcoin and Ethereum) stands at -$209 billion over the 13 months since January 2025. The final time demand matched provide was close to zero in early 2025.
Since then, the market has moved strictly in a single path. This extended web promoting on centralized alternate spot markets signifies a whole absence of institutional accumulation for smaller tokens.
The -$209 billion determine doesn’t essentially sign a market backside. Moderately, it merely means the patrons have vanished.
A significant factor driving this collapse is the sheer quantity of recent property.
A report from crypto pockets maker Tangem indicated that greater than 120 million distinctive tokens had been created as of February 2025, in contrast with fewer than 500 tokens a decade earlier.
This exhibits that too many tokens are competing for a market share that has not expanded basically. The dynamics render any potential restoration extremely fragile and threaten the survival of low-cap tokens.
Furthermore, a few of these property persistently schedule token unlocks, additional compounding this difficulty.
Token unlocks add new provide on fastened dates, no matter market sentiment. In reality, a Keyrock research signifies that 90% of those occasions exert unfavourable worth strain, with declines usually starting roughly 30 days earlier than the scheduled launch.
Bitcoin has no scheduled dilution, making it a cleaner maintain for traders in search of to keep away from looming provide overhangs over a one-year horizon.
Buying and selling volumes sign a flight to high quality on this bear market
Market specialists have famous that the cryptocurrency trade is in a bear market, which has pulled Bitcoin worth inside a spread between $65,000 and $72,000.
Throughout deep corrections or the late phases of bear markets, traders sometimes rotate their capital towards the flagship digital asset whereas abandoning altcoins.
Information from CryptoQuant point out that this conduct is clear in buying and selling volumes on Binance, the biggest alternate out there.
As Bitcoin moved again above $60,000, a notable change within the distribution of buying and selling quantity emerged.
On Feb. 7, Bitcoin buying and selling quantity on Binance regained dominance, accounting for 36.8% of whole alternate quantity. Compared, altcoins represented 35.3% of the amount, and Ethereum accounted for 27.8%.
This quantity confirmed that altcoin buying and selling exercise has suffered probably the most throughout this downturn.
In November, altcoins accounted for 59.2% of Binance’s buying and selling quantity. By Feb. 13, their share had fallen to 33.6%, representing an virtually 50% contraction in exercise.
This sample of capital flight has appeared repeatedly throughout earlier corrective phases, notably in April 2025, August 2024, and October 2022.
During times of elevated uncertainty and market stress, traders naturally gravitate towards Bitcoin.
Altcoins trillion-dollar rotation to Bitcoin
Market specialists have famous that the timeline for the top of the present bear market stays extremely unsure.
But, if historic patterns maintain true, the subsequent three to 4 months may set off a large capital rotation from the obscure tokens into BTC.
On this state of affairs, analysts at CEX.io undertaking that between $740 billion and $1.2 trillion in buying and selling quantity may shift from altcoins into Bitcoin.
In a conservative situation, Bitcoin’s quantity share would enhance by 5%-6%, bringing its whole share to 46%. This assumes the overall market quantity declines by 10% to fifteen%.
Nevertheless, an elevated situation suggests an 8%-9% enhance in Bitcoin’s quantity share, pushing it to 49% and leading to a $1.2 trillion rotation.
It is because present market circumstances carefully mirror these of the 2022 bear market, when Bitcoin’s quantity share rose by 13.5% over 4 months. Notably, The same 13.6% enhance occurred in mid-2018.
CEX.io analysts instructed mycryptopot that whereas a full 13.5% soar is much less possible now, given Bitcoin’s present quantity dominance of 40%, there stays substantial room for additional consolidation.
In accordance with them:
“Usually, the larger the decline in total crypto buying and selling quantity, the larger the achieve in market share Bitcoin can obtain. For example, in 2022, whole month-to-month quantity declined by roughly 17% through the Could-September interval. In flip, the present level in Bitcoin’s quantity dominance (40%) is notably larger than in 2018 and 2022, suggesting rotation has already begun. But it stays nicely under the 42-46% peaks seen throughout intense rotation phases, indicating substantial room for additional consolidation.”
