Bitcoin News Today: Investor Flight to Altcoins and Regulatory Scrutiny Drive Bitcoin's Declining Dominance

Bitcoin's dominance (BTC.D) in the cryptocurrency market has dipped to 59.46%, a 1% decline, as investors shift capital to altcoins amid growing uncertainty and regulatory scrutiny. The metric, which measures Bitcoin's market capitalization relative to the total crypto market, often signals investor sentiment-high dominance typically precedes bull runs, while declines suggest capital is flowing to alternative cryptocurrencies in pursuit of higher returns according to market analysis.

The recent drop coincides with a broader market selloff, with Bitcoin (BTC-USD) trading near $96,847 after slipping below $100,000 earlier this week. U.S.-listed spot Bitcoin ETFs saw $870 million in outflows on Thursday, the second-largest single-day withdrawal since their launch, according to CoinDesk.

Ethereum (ETH-USD) and smaller tokens like XRP also declined, with Ether ETFs experiencing $259.7 million in outflows according to market data. Analysts attribute the exodus to macroeconomic headwinds, including the U.S. government shutdown, which has dampened momentum in crypto markets.

Regulatory actions have further pressured Bitcoin's position. A London court sentenced Zhimin Qian to over 11 years for laundering 60,000 BTC ($6.2 billion), while U.S. authorities seized 127,000 BTC ($13 billion) linked to the 2020 LuBian mining pool hack according to market reports. These developments, coupled with the SEC's ongoing oversight, have heightened risk aversion. "The shutdown has been a wet blanket for crypto," said Ben Lilly of JLabs Digital, noting the absence of policy clarity has stymied institutional inflows.

Despite the sell-off, some institutional players remain bullish. Michael Saylor, CEO of MicroStrategy, reaffirmed his commitment to Bitcoin accumulation, dismissing reports of Strategy selling the asset. He forecast Bitcoin would outperform gold and the S&P 500 by year-end. Meanwhile, American Bitcoin (ABTC), a miner partially owned by Eric Trump, reported a Q3 profit and doubled its BTC holdings, signaling confidence in long-term fundamentals.

RockToken, a platform offering infrastructure-backed crypto investment plans, highlighted growing institutional interest in Bitcoin as a long-term asset. Its structured contracts, which allocate capital to Bitcoin, Ethereum, and USDC, appeal to investors seeking stable exposure amid volatility according to market analysis. However, the broader market remains fragile. Long-term holders are accelerating sales, and retail demand has waned, with XRP's futures open interest hovering near $3.78 billion-a 10% drop from mid-November levels.

Technical indicators reinforce the bearish outlook. Bitcoin's 50-day EMA crossed below its 100-day EMA, forming a "death cross," while the RSI fell to 32, suggesting intensifying selling pressure according to market data. Analysts at 10X Research have declared the market in a bear phase, citing weak ETF inflows and subdued retail participation.

Looking ahead, optimism hinges on Washington reopening and potential Federal Reserve rate cuts. "A post-shutdown rebound is possible, but momentum has been lost," said Nic Puckrin of The Coin Bureau according to market analysis. For now, Bitcoin's dominance remains a barometer of a market struggling to regain its footing.

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