Bitcoin News Today: Altcoin Rally Surges 35% as Bitcoin Dominance Drops 7%

As Bitcoin approaches its all-time highs, the broader cryptocurrency market is experiencing a significant shift. Last week, a decline in Bitcoin's dominance paved the way for an altcoin rally, with major tokens such as Ethereum (ETH), Solana (SOL), and XRP achieving double-digit gains. This surge marks one of the most substantial altcoin movements in over a year, as capital rotation accelerates while Bitcoin consolidates.

Bitcoin reached a peak of $123,054 but quickly settled into a consolidation range, currently trading at $118,185. This stability has created an opportunity for higher-beta assets to gain traction. Bitcoin’s market share decreased by 7% last week, the most significant drop since December 2023, without a major selloff in BTC itself. This divergence has historically preceded altcoin-led rallies.

Ethereum saw a 19.45% increase, XRP rose by 21.4%, and Solana outperformed both. The “Others Index,” which excludes stablecoins and top-10 cryptocurrencies, surged by 35%, adding approximately $85 billion in new altcoin market capitalization. This capital migration indicates that investors are becoming more comfortable with taking on additional risk, as Bitcoin's consolidation at high levels builds a foundation for altcoin speculation, signaling a healthy market phase.

Bitcoin has maintained a position above the cost basis of 95% of its supply, but long-term holders are now distributing, sending BTC to newer retail investors and ETFs. This is not a bearish turn but rather a profit-taking and rebalancing to other assets. The rotation is not random; it is supported by liquidity patterns, ETF flows, and profit zone psychology, with altcoins being the next in line for investment.

Bitcoin’s price is currently below the short-term holder band around $120,000, a zone where investors tend to de-risk and reallocate their assets. This reallocation is now fueling the altcoin rally. Historically, dominance contraction has preceded altcoin breakouts, with Bitcoin leading early gains before entering a cooling phase where altcoins catch up. The spread between BTC’s volatility and that of Ethereum and Solana has widened for the first time since Q1, with Solana showing more upside momentum.

The trend is also supported by increasing altcoin spot volume and leveraged trading on major exchanges. Open interest in ETH and SOL perpetual futures increased by over 30% week-on-week. Analysts believe this rally has the potential to last, with room for growth as BTC ETFs stabilize the market. Wallet activity for many altcoins has increased sharply, with Ethereum’s active address count rising by 14% last week, a metric often correlated with sustainable price strength.

DeFi and Layer-1 projects are also being speculated to outperform next, with AVAX, INJ, and LDO showing breakout setups. This altcoin rally is expected to be a mid-2025 market theme, as capital flows into large- and mid-cap tokens, re-igniting momentum not seen since early 2021. If institutional demand for BTC remains steady and risk appetite stays high, this rotation could turn into a full-blown altcoin season. However, volatility is always present, and traders must closely monitor levels in both Bitcoin and altcoin markets.