Bitcoin News Today: The Altcoin Takeover: Why Bitcoin’s Grip is Slipping

Bitcoin’s dominance in the cryptocurrency market is showing signs of weakening, with altcoins gaining traction in early September. Analysts suggest that this shift could be a precursor to a broader altcoin rally, especially in the context of a potential Federal Reserve rate cut. Ito Shimotsuma, a market analyst, highlights that Bitcoin dominance charts are currently among the weakest, indicating strong momentum for alternative tokens [1]. This trend has been supported by increased retail participation and rising trading volumes in smaller projects, as investors seek higher returns compared to Bitcoin.

Technical indicators also point to growing pressure on Bitcoin. Doctor Profit, a noted analyst, has noted bearish divergences on both daily and weekly charts, alongside a CME gap near $93,000 and reduced trading volume [1]. He argues that the rally in Bitcoin has been driven primarily by futures rather than spot buying, which could heighten market risks. Large institutional investors and ETFs have also experienced outflows, signaling a lack of strong institutional demand [1].

The broader market is closely watching the upcoming Federal Reserve meeting on September 17, which could act as a catalyst for a market-wide correction. Doctor Profit explained that the first major rate cut in years often triggers a correction after uncertainty rises and retail positioning becomes vulnerable [1]. Retail traders, who have entered Bitcoin around the $110,000–$120,000 range, may face significant losses if the price drops to $90,000–$95,000. This has led some analysts to expect a short-term correction in September before both Bitcoin and Ethereum potentially reach new highs later in the year.

Meanwhile, the Total2/BTC ratio has broken out of a three-year downtrend, signaling a potential altcoin season similar to 2021 [5]. According to crypto analyst Cas Abbé, this development marks a bullish shift in the altcoin market, with key resistance levels flipping to support [5]. This could lead to a surge in altcoin prices, particularly for large-cap tokens like Ethereum and Solana. On-chain data supports this view, showing a 15% increase in Ethereum’s daily active addresses over the past week [5].

Historically, altcoin seasons have followed a distinct pattern, beginning with Bitcoin stabilizing or moving sideways, followed by a shift in capital toward Ethereum and other large-cap altcoins [3]. As investors seek out lesser-known but promising altcoins, the broader market typically experiences a rally. This pattern was evident in 2017 and again in 2021, when Ethereum and other altcoins surged following Bitcoin’s initial price peak [3]. Today, the market appears to be following a similar trajectory, with Ethereum recently reaching a new all-time high of $4,955 [2].

Investors are also closely monitoring presales of promising altcoins such as TOKEN6900, Snorter Token (SNORT), and Bitcoin Hyper (HYPER), which are drawing significant attention due to their community-driven models and innovative use cases [2]. These projects are leveraging the growing interest in meme coins and utility tokens, with some having raised millions in presale funding. As the market continues to shift toward altcoins, these projects may serve as early indicators of the broader trend.

However, the altcoin rally is not without risks. Market volatility remains high, and a failure to hold key support levels could result in a false breakout, pulling altcoins back into Bitcoin dominance [5]. Analysts recommend that traders monitor key technical indicators, such as RSI and MACD, to gauge overbought conditions and potential pullbacks. Diversification and risk management are also essential, especially as the market prepares for a possible correction following the Federal Reserve’s policy shift.

As the EU explores using public blockchain networks like Ethereum and Solana for its digital euro, the broader implications for altcoin markets could be significant [6]. A move toward open, interoperable infrastructure could increase institutional trust in public blockchains, potentially boosting on-chain euro liquidity and altcoin adoption. This aligns with growing European concerns over U.S. dollar-dominated stablecoins and the desire for a sovereign digital currency alternative. While no final decision has been made, the exploration of public blockchain options signals a shift in the global CBDC landscape.

Source:

[1] Bitcoin Dominance Weakens as Altcoins Rally Ahead of Expected September Correction (https://www.livebitcoinnews.com/bitcoin-dominance-weakens-as-altcoins-rally-ahead-of-expected-september-correction/)

[2] Best Altcoins to Watch as the Crypto Market Faces a Potential Pullback (https://www.mexc.com/en-GB/news/best-altcoins-to-watch-as-the-crypto-market-faces-a-potential-pullback/74933)

[3] Altcoin Season Explained: What it is and How to Spot It (https://icobench.com/academy/altcoin-season/)

[4] Global Cryptocurrency Market Cap Charts (https://www.coingecko.com/en/global-charts)

[5] Total2/BTC Breakout Signals Potential Altseason: 3-Year Downtrend Broken and Resistance Flips to Support (https://blockchain.news/flashnews/total2-btc-breakout-signals-potential-altseason-3-year-downtrend-broken-and-resistance-flips-to-support)

[6] EU Considers Ethereum, Solana for Digital Euro Amid Stablecoin Sovereignty Push (https://yellow.com/news/eu-considers-ethereum-solana-for-digital-euro-amid-stablecoin-sovereignty-push)