Altcoin market poised for growth as Bitcoin dominance wanes, says Coinbase.
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Coinbase Signals Potential Altcoin Surge as Bitcoin Dominance Declines
Coinbase, a leading cryptocurrency exchange, has indicated that a significant shift in the crypto market may be on the horizon. With Bitcoin’s dominance reaching its lowest point in six months, the stage is set for a potential altcoin season, according to a recent report by Coinbase Institutional.
Altcoin Market Gains Momentum
Related: The Ripple Effect: Crypto Venture Capitalists and the Altcoin Season
Bitcoin’s market share has dropped from over 65% in May to approximately 59% by August, suggesting a capital rotation into altcoins. This shift is underscored by a 50% increase in the altcoin market cap since July, positioning the market for a potential surge as September approaches.
David Duong, Coinbase Institutional’s global head of research, noted, “Current market conditions suggest a potential shift towards a full-scale altcoin season.” He highlighted that substantial retail capital is currently on the sidelines, which could be activated with a more favorable economic environment, such as potential interest rate cuts by the Federal Reserve.
Economic Factors and Market Indicators
Related: Whale Movements Indicate Potential Altcoin Season
July’s U.S. Consumer Price Index (CPI) reported a year-over-year inflation rate of 2.7%, increasing the likelihood of a Fed rate cut in September. A lower interest rate environment could attract fresh capital into high-risk assets, including altcoins, thereby catalyzing market growth.
Coinbase’s definition of an altcoin season involves 75% of the top 50 altcoins outperforming Bitcoin over a 90-day period. While altcoin season indexes have been climbing, they have not yet reached this threshold, suggesting room for further growth.
Institutional Interest and Market Dynamics
Related: Bitcoin's Dominance and Altcoin Season: A Forecast for XRP's Surge by 2025
Institutional interest in Ethereum and other digital assets is driving momentum in the altcoin market. The divergence between altcoin season indexes and total market cap reflects this rising interest, with Ethereum playing a pivotal role in this dynamic.
Joanna Liang, founding partner of Jsquare, a venture capital firm based in Singapore, emphasized the need for a supportive macroeconomic backdrop, declining Bitcoin dominance, and a compelling new narrative to fully ignite an altcoin season. Past cycles have been driven by clear catalysts, such as ICOs and DeFi/NFTs, and the market is currently awaiting a similar signal.
For more insights, readers can explore the Coinbase monthly outlook and the TradingView Bitcoin dominance chart.
Sophia is a pioneer in the world of Web3 and NFT ecosystems. With extensive experience in digital art and tokenomics, she breaks down the intricate relationships between creativity and blockchain technology. Her unique perspective bridges the gap between technology and culture.
