Bitcoin News Today: Altcoins Rise as Bitcoin’s Grip on Crypto Market Weakens

Bitcoin dominance, a metric measuring Bitcoin’s market capitalization as a percentage of the total cryptocurrency market cap, has retreated from its peak of 62% to 55%, according to The Block. This decline signals a potential shift in capital allocation from Bitcoin to alternative cryptocurrencies (altcoins), as institutional and retail investors begin to show renewed interest in assets such as Ethereum (ETH) and Solana (SOL). The 700 basis point drop from the cycle high is seen as a positive setup for altcoins heading into the fourth quarter, particularly as multiple teams are exploring digital asset treasures (DATs) on these platforms [1].

Bitcoin dominance has historically fluctuated widely, ranging from as high as 90% to as low as 32% in the past. The 2017 ICO boom, driven by Ethereum’s rise, pushed Bitcoin’s dominance down significantly, before it rebounded during a bear market in 2019. The recent resurgence of Bitcoin dominance to around 60% reflects a broader market trend where investors are gravitating back toward Bitcoin as a more reliable and established asset, especially as the speculative fervor surrounding many altcoins has waned [2].

The current 55% dominance level suggests the market is in a transitional phase where altcoins can begin to build momentum. However, a key challenge remains whether this momentum is driven by genuine spot market demand or primarily by speculative trading via derivatives. Analysts are closely watching whether institutional capital, which may be entering the market through digital asset treasuries and ETF products, translates into direct token purchases that can sustainably drive price appreciation [1].

On the other hand, Bitcoin’s price performance has shown signs of stagnation, with long-term holders reportedly distributing coins and ETF inflows slowing. This has been compounded by a surge in the MOVE index—a bond market volatility indicator—which has risen from 77 to 89 in three days. Higher volatility in Treasury notes can lead to liquidity tightening, increased borrowing costs, and a broader market sell-off. Historically, Bitcoin’s price rallies have coincided with declining trends in the MOVE index, suggesting that the recent spike may pose a headwind for BTC bulls [3].

In Asia, South Korea has introduced stringent regulations for crypto lending services in response to concerns over investor protection and market stability. The Financial Services Commission (FSC) has implemented a 20% annual interest rate cap on crypto loans and banned leveraged lending that exceeds the value of collateral. These rules aim to prevent excessive risk-taking in the sector, especially after a rapid rise in lending activity saw 27,600 investors borrow $1.1 billion in one month, with 13% facing forced liquidation due to market volatility. The new framework also mandates stricter oversight for service providers and enhanced safeguards for users [4].

The regulatory moves in South Korea reflect a growing global trend of tightening crypto lending rules to mitigate risks associated with over-leveraged positions and speculative trading. Regulators are increasingly prioritizing investor protection while striving to maintain innovation in the digital asset space. As the market navigates these evolving regulatory landscapes and shifting investor sentiment, the balance between Bitcoin and altcoins will remain a critical focus for market observers.

Source: [1] The Block (https://www.theblock.co/post/369123/bitcoin-dominance-slides-to-55-opening-the-door-for-altcoin-rotation) [2] NewHedge.io (https://newhedge.io/bitcoin/bitcoin-dominance) [3] CoinDesk (https://www.coindesk.com/markets/2025/09/05/bitcoin-bulls-should-keep-an-eye-out-for-spike-in-key-bond-market-index) [4] Yahoo Finance (https://finance.yahoo.com/news/south-korea-caps-crypto-lending-101212429.html)