Blue-chip crypto dominance: Why this cycle is different from 2021
Key Takeaways
Bitcoin and Ethereum lead the pullback, exhibiting blue-chip crypto dominance whilst $200 billion left the market. Altseason hype cooled as ETH’s rise couldn’t shift momentum past blue chips.
This week, the crypto market shed billions, trimming its cap from $4 trillion to $3.8 trillion. That’s round $200 billion in outflows.
Bitcoin [BTC] and Ethereum [ETH] slipped beneath key ranges, and their dominance retreated barely. Naturally, this indicated capital rotated out of the ecosystem, sparking a “market-led” pullback.
Reinforcing this, the altseason nonetheless hasn’t kicked in. The index has slipped from its month-to-month excessive of 56 to 51.
The truth is, whereas it held above 50, we have been removed from a full-blown season. Having mentioned that, possibly the “hype” was outpacing actuality this cycle.
Blue-chip crypto features mislead
This cycle has been blue-chip crypto-led, with BTC and ETH driving most inflows. BTC blasted by means of 4 all-time highs this yr, whereas ETH has but to interrupt one, although it got here inside 3% final week.
Plus, ETH dominance ticked as much as 14%, its highest since final November. Nonetheless, its market cap nonetheless trailed the 2021 $550 billion peak. BTC, in the meantime, scaled a document $2.4 trillion.
Backside line: ETH remains to be enjoying catch-up.
The BTC–ETH market cap hole has expanded to $1.865 trillion from $750 billion 4 years in the past, implying BTC has outgrown ETH by 2.5× this cycle.
Supply: CoinMarketCap (Bitcoin market cap)
This divergence advised the market could be overreading the hype.
Certain, Bitcoin dominance [BTC.D] slipped from 65% in mid-June to 59%, whereas Ethereum dominance [ETH.D] jumped from 9.5% to 14%, exhibiting ETH’s relative outperformance.
But, we’re nonetheless nowhere close to a full-blown altseason.
The important thing takeaway? ETH.D power alone didn’t sign altseason. The truth is, the market mistook ETH’s relative features for a broader rotation.
Bitcoin stays the market’s north star
The crypto market has turned risk-off, and altcoins are feeling the pinch.
TOTAL2 (ex-BTC market cap) took a 4.56% hit this week, shedding over $100 billion, whereas Bitcoin dipped 3.1% to $2.27 trillion. Briefly, altcoins are underperforming BTC as merchants rotate out and de-risk their positions.
This backed AMBCrypto’s view: altseason “hype” is overstating the rotation.
Capital is favoring BTC whereas altcoins lag. Backing this, ETH.D fell simply 2%, signaling funds are rotating out of the remainder of the alt house.
Supply: Blockchaincenter
The consequence? The altseason index has slid to 51 from final week’s 56, marking its fourth failed breakout this yr. Each prior attempt stalled beneath 60 as capital rotated again into BTC.
Appears to be like like historical past would possibly repeat.
Even with BTC.D dipping, Bitcoin’s market share nonetheless outstrips any alt, holding the highlight on BTC. Briefly: Hype talks altseason, however the market remains to be operating on Bitcoin rails.
