Bitcoin Dominance Surges to 64.7% as Altcoins Lag Behind

Crypto experts are advising altcoin traders to adopt disciplined trading strategies rather than being swayed by market hype. This advice comes as Bitcoin's dominance in the crypto market has remained above 65% for two years, making the buy-and-hold strategy less effective. Stockmoney Lizards, a prominent analyst, has introduced the “Low-IQ Altcoin Strategy,” which involves splitting capital into five equal parts, entering trades when the Relative Strength Index (RSI) is below 30, and exiting at gains of 30-50%. This strategy aims to avoid the pitfalls of emotional trading and FOMO (fear of missing out).

Bitcoin's recent rally in late June has left many altcoins behind, with Bitcoin's price surging from $102,300 to around $107,800 within nine days. This rally has pushed Bitcoin's market dominance to 64.7%, its highest level since early 2021. In contrast, altcoins like Solana (SOL), Cardano (ADA), and Avalanche (AVAX) have underperformed, failing to sustain their earlier gains from 2024. This trend is reflected in investment flows, with $1.3 billion flowing into Bitcoin-focused products compared to just $583 million for Ethereum and minimal inflows for altcoins. Institutional investors continue to favor Bitcoin and Ethereum, as evidenced by nine consecutive weeks of positive inflows into these assets.

On-chain data further supports this trend, with large wallet addresses accumulating Bitcoin and Ethereum while retail traders exit the market. This shift in sentiment has left many altcoin holders with portfolios deep in the red, and trading volumes in many altcoins have fallen. High-profile losses in leveraged trades have also contributed to the fragile market sentiment. Experts are urging traders to adopt risk-managed, rule-based strategies to navigate this challenging environment. Prominent analysts like @JeremyACFD and @CryptoMichNL have emphasized the importance of sticking to pre-defined exits and avoiding emotional trading. They advise traders to enter positions based on data rather than chasing short-term spikes driven by hype.

One widely shared framework, proposed by Stockmoney Lizards, suggests allocating altcoin capital into five equal segments, entering trades when the RSI dips below 30, and exiting at gains of 30-50%. This approach aims to avoid all-in positions and maintain a clear exit discipline. The strategy also recommends reinvesting half of the profits into stablecoins and half into Bitcoin, reflecting a long-term accumulation mindset. This disciplined approach is seen as a way to avoid the significant losses that many altcoin traders have experienced in the current market environment.

The macroeconomic backdrop adds further complexity to the altcoin outlook. The Federal Reserve's decision to hold its benchmark rate steady and indicate only two cuts through the year-end has contributed to market uncertainty. Inflation remains above target, and global tensions, particularly trade shifts, are adding to the volatility. While some investors point to seasonality as a potential catalyst for mid-cap altcoins, the dominant signals of Bitcoin dominance and ETF-driven demand continue to overshadow the altcoin segment. Experts warn against expecting a sudden “altseason” until Bitcoin dominance retreats and institutional flows diversify, making altcoin rallies likely to remain sporadic.