- Bitcoin’s price has stabilised at US$83,746 after a sell-off, while Bitcoin dominance has reached new cycle highs.
- Matrixport analysts suggest the rising Bitcoin dominance indicates altseason is actually fizzling out, having lasted “barely a month” from Trump’s election to early December.
- Meanwhile, Franklin Templeton’s recent filings for XRP and Solana ETFs may pave the way for more altcoin ETF approvals, potentially igniting an altseason.
Bitcoin seems to have stopped its relentless sell-off, at least for now. The price of BTC has gone slightly up in the past 24 hours, currently sitting at US$83,746 (AU$132,375).
Meanwhile, Bitcoin dominance (BTC.D) has reached new highs, breaking out of a range it has been in since February. This is both a cycle high and the highest it has been since the 2021 altseason.
Bitcoin dominance, expressed as a percentage, measures Bitcoin’s market capitalisation relative to the total crypto market cap (altcoins).
Related: Analysts: Real Reason Why Market Crashed and Why It Doesn’t Matter
Traders use it as an indicator of market sentiment and trends, with higher dominance suggesting investors favour Bitcoin as a safer asset, while lower dominance indicates increased interest in alts.
Is Altseason Cancelled This Cycle?
So, while the BTC.D high has traders speculating that we are about to see another altseason, analysts at Matrixport offer a different perspective.
They said the soaring dominance is an actual sign that altseason is fizzling out and “was short-lived”.
It lasts barely a month, from Trump’s election in November to early December, when a stronger-than-expected U.S. jobs report shifted market focus toward a more hawkish Federal Reserve.
MatrixportThe analysts wrote that seasoned investors sold their altcoins into BTC, which, although it has also weakened, has “significantly outperformed the broader altcoin market”.
For Bitcoin to go higher, there needs to be a liquidity injection, which will take time, considering the US Fed’s “hawkish stance”, they added.
Can Altcoins ETFs Rekindle Altseason?
With altseason seemingly cancelled, hopes are high that the US Securities and Exchange Commission (SEC) will approve the several altcoin exchange-traded funds (ETFs) that are currently sitting on SEC official’s desks.
And more ETF filings are being added on an almost daily basis. Tuesday, Franklin Templeton filed a S-1 form for an XRP ETF and the next day Cboe BZX Exchange filed a 19b-4 for a Solana (SOL) ETF on behalf of Franklin Templeton.
Both filings are essential steps in the process of introducing new ETF products: the 19b-4 is about changing exchange rules to allow a new type of trade (often specific to novel or innovative products like a crypto ETF), and the S-1 is about registering new securities with the SEC to offer them publicly.
Related: VanEck Taps AVAX, Registers Avalanche Spot ETF in USv
Despite several filings and some being delayed by the SEC, Bloomberg Intelligence analyst James Seyffart didn’t think the most recent filing was “particularly newsworthy or noteworthy”.
Though he told The Block that “a big asset manager like Franklin throwing their hat in the ring for solana isn’t completely meaningless”.
It remains to be seen whether – if approved – altcoin ETFs will reignite a rally or even lead to altcoin season.
Credit: Source link
