Bitcoin News Today: Bitcoin Market Share Falls to 61% as Altcoins Surge on 2.6% Total Crypto Cap Growth

Investors are reallocating capital to smaller altcoins as Bitcoin’s market dominance declines, with data showing a 2.6% growth in total crypto capitalization since July 2025, driven by momentum in non-BTC assets. The TOTAL3 index, which excludes Bitcoin and Ethereum, has become a key barometer for altcoin performance, with analysts forecasting further gains as funds rotate out of BTC [1]. This shift aligns with historical patterns where reduced Bitcoin dominance has historically triggered capital inflows into altcoins, a trend now reemerging as Bitcoin’s share of the market dropped to 61% in early July [2].

The altcoin rally has been particularly pronounced in tokens like Ethereum, Solana, and XRP, which have outpaced Bitcoin’s muted gains amid broader market volatility. Institutional demand for Ethereum has surged, while XRP and BNB reached record highs in July 2025 [3]. However, the sector remains volatile, with over $200 million in altcoin-related liquidations recorded in mid-July as prices faltered [4]. Analysts attribute the recent outflows to speculative trading activity and macroeconomic uncertainties, though retail investor interest has surged, pushing tokens like Solana into the spotlight [5].

The rotation away from Bitcoin is linked to waning institutional demand, as on-chain data reveals slowing accumulation of BTC. This has prompted funds to rebalance portfolios toward altcoins, particularly in the DeFi and layer-1 blockchain sectors [6]. Regulatory developments have also played a role, with recent clarity on spot XRP ETFs and US policy updates fueling institutional interest in non-BTC assets [7]. However, market fragility persists, as smaller altcoins face heightened exposure to sentiment shifts and regulatory risks compared to Bitcoin.

Looking ahead, the trajectory of altcoin performance will depend on Bitcoin’s stability and broader macroeconomic conditions. While tokens like XRP and BNB are positioned to test key resistance levels, further liquidations could occur if Bitcoin weakens below $120,000, potentially accelerating capital reallocation to altcoins [8]. Analysts caution that while historical "altcoin seasons" often follow Bitcoin’s dominance peaks, the current cycle remains fragmented, with retail and institutional flows diverging in their strategies [9].

Retail traders have amplified altcoin demand, citing renewed confidence in the sector despite Ethereum’s brief dip below $3,700 in July [10]. This contrasts with the broader market, where blue-chip altcoins continue to outperform Bitcoin’s sideways movement. The interplay between institutional caution and retail optimism underscores the speculative nature of the current cycle, with outcomes hinging on Bitcoin’s consolidation and regulatory developments in key markets.

Source: [1] [Bitcoin News Today - Altcoin Gains Accelerate](https://www.ainvest.com/news/bitcoin-news-today-altcoin-gains-accelerate-bitcoin-market-share-falls-4-capital-rotation-2507/) [2] [Smaller Altcoins Face 40% Slump](https://www.ainvest.com/news/ethereum-news-today-smaller-altcoins-face-40-slump-volatility-risks-mount-3m-eth-liquidations-2507/) [3] [Is Altcoin Season Coming?](https://www.fxstreet.com/cryptocurrencies/news/is-altcoin-season-coming-202507230922) [4] [Altcoin Liquidations Exceed $200M](https://finance.yahoo.com/news/altcoin-season-takes-breather-sol-143532929.html) [5] [Retail Interest in Altcoins Hits High](https://www.ccn.com/news/crypto/retail-interest-in-altcoins-hits-new-high-altseason-on-the-cards/) [6] [Bitcoin Hovers Below $120K](https://www.tradingview.com/news/newsbtc:6224e9205094b:0-bitcoin-hovers-below-120k-as-on-chain-indicators-point-to-slowing-demand/) [7] [SEC Greenlights Spot XRP ETF](https://www.mitrade.com/insights/news/live-news/article-3-982471-20250724) [8] [3 Altcoins to Reach New Highs](https://cryptomus.com/blog/3-altcoins-that-could-reach-new-highs-this-week-news?srsltid=AfmBOorWUq5hRdNTsPU9IXkJaXmzPA8uI8tpdOA_VSp2GqCzmfajbKFO) [9] [Altcoin Season Takes Breather](https://finance.yahoo.com/news/altcoin-season-takes-breather-sol-143532929.html) [10] [Altcoins Market Turns Red](https://www.mitrade.com/insights/news/live-news/article-3-982407-20250724)