Bitcoin Dominance Loses Steam as Capital Rotates into Altcoins

The cryptocurrency market has been experiencing a shift in dominance, with Bitcoin (BTC) losing ground near the 60% mark. This decline in dominance has sparked speculation about a possible rotation of capital into altcoins, reminiscent of the rallies seen in 2017 and 2021.

According to CryptoQuant's Quicktake note, the BTC.D metric, which measures Bitcoin's share of total market cap, has begun to fade after testing the 60% area. This slowdown is interpreted as a sign that capital concentration around Bitcoin may be loosening.

The RSI and MACD indicators on the dominance chart are also flashing bearish signals, with a fresh crossover printed this week. CryptoQuant analyst CryptoOnchain noted that their 'Altcoin Volume Increasing Trend' indicator has activated, indicating an increase in altcoin volume on centralized exchanges.

Historically, when BTC dominance falls below a certain threshold, it can trigger an altcoin rally. In 2017, BTC.D collapsed from nearly 95% to 35%, fueling one of crypto's strongest altcoin rallies. A similar setup reappeared in 2021, when dominance touched 70% before sliding below 40%.

While selective rotation is already showing up in pockets, with Solana (SOL) and SUI (SUI) posting recent double-digit gains, most activity still leans on leveraged trading rather than sustained spot accumulation. The Altcoin Season Index sits near 35, well below the 75 threshold that typically confirms a full rotation.