Bitcoin's Surge Leaves Altcoins Behind, Market Dominance Nears 70%

Bitcoin’s recent surge has sparked significant attention and raised questions about the overall health of the cryptocurrency market, particularly as altcoins struggle to keep pace. While Bitcoin captures headlines with its price gains, the altcoin market is experiencing an unprecedented divergence, revealing underlying weaknesses. This rally, according to a COINOTAG analyst, is not built on solid foundations, raising concerns about market stability.

Bitcoin’s ascent is no longer lifting all boats in the crypto sea. The 14-period rolling correlation between Bitcoin and major altcoins has sharply declined since late April 2025, signaling trouble. Unlike previous price surges where altcoins surged alongside Bitcoin, the trend has shifted dramatically. Most altcoins are now exhibiting near-zero or negative correlation on the 12-hour timeframe. This disconnection is illustrated by cooler blue shades on the correlation heatmap, indicating a narrowing market landscape. A Bitcoin-led rally often lacks lasting strength and may foreshadow a broader risk-off shift in market sentiment.

The climb in Bitcoin’s price has not only boosted its own market standing but has also spurred a significant resurgence in overall market dominance, especially when considering stablecoins. The combined dominance has approached 70%, reflecting a risk-off behavior and a consolidation of capital into perceived “safer” crypto assets. Despite Bitcoin’s rising market dominance, it remains below its 2021 peak. The inclusion of stablecoins in the dominance metrics suggests that traders are remaining cautious and waiting for clearer market signals. Interestingly, despite the positive price action, changes in Bitcoin dominance have consistently trended negative, highlighting a continued capital rotation and a prevailing indecision within the market.

The rally appears largely influenced by institutional investors consolidating capital into Bitcoin and stablecoins rather than any widespread bullish sentiment. As Bitcoin hovers near all-time highs, risks are heightened; the gains in dominance seem to be stalling as momentum wanes. If institutional buying slows or external market factors tighten, a sharp market correction could occur. Thin liquidity, cautious retail participation, and reliance on whale-driven flows create a precarious environment for the current market setup. Without fresh capital entering the market, this rally risks dissipating as quickly as it has emerged.

As Bitcoin continues to exhibit a strong performance amid altcoin struggles, the concerns regarding market sustainability are increasingly prominent. Analysts advocate for caution and better risk assessment going forward, as the indicators suggest an unstable scenario that could shift at any moment.