Bitcoin (BTC) is the market leader, thanks to a surge of institutional capital.
Total 3 is the name given to altcoins excluding Ethereum, which has reached its highest market share in three years.
A Recent reports Bitfinex reports that capital inflows have been unprecedented since the low pre-election of $66,880, just 20 days prior. Bitcoin has reached new highs every day. BTC peaked in the $99k range before a small correction pushed it to $95,611 at the weekend.
Despite profit-taking by long-term holders, Bitcoin’s ability to maintain its upward trajectory is supported by demand from new investors, mainly through exchange-traded funds (ETFs).
The net inflows of US Bitcoin ETFs during the last week exceeded $3.35 billion.
The market, however, saw a significant price drop as a result of a mismatch in supply and demand. In order to monitor daily ETF inflows as Bitcoin approaches the important $100,000 mark, it is vital. Any slowdown may indicate waning investor interest and signal a possible larger correction.
Furthermore, the broader altcoin market, represented by the Total3 Index (excluding Bitcoin and Ethereum), also hit new cycle highs, increasing by 23.2% — wthe most significant move since April 2021.
This rise in altcoins could be a result of market sentiment and regulatory developments.
The performance of large-cap altcoins such as Solana has reached new records, surpassing Bitcoin in significant timeframes. It is the start of what we call “the Altcoin Boom”. “alt season,”The period during which altcoins experience significant gains.
Countering the pressure of a seller
This new institutional demand was crucial to absorbing the selling pressure.
Historically, when Bitcoin reaches new all-time highs in a halving year, long-term holder (LTH) wallets — typically accumulating during bear markets—become more active.
These holders have an average purchase price of $24,912, which represents a substantial profit at the current price level. LTHs are selling their Bitcoin holdings as the price of Bitcoin has risen. Since the all-time high was reached last month, the price of Bitcoin has surpassed $73,666.
The Long-Term Holding Spending Binary indicator, which tracks the percent of days when LTH spends exceeds their buying, indicates increased selling pressure.
Despite this, the current distribution is still less severe than the previous peaks, which occurred in March 2021, and March 2024. This indicates that the sale-off has not yet been fully controlled. When this indicator reaches these levels, it usually forecasts that the price could top out within three to four month if sustained.
Overcoming traditional assets
This recent surge marks Bitcoin’s third-largest trough-to-peak move since February 2020. Given Bitcoin’s increased market cap, the capital required to achieve similar percentage gains has grown substantially.
If Bitcoin continues to maintain its current momentum, this could be the largest deviation from the median performance of the month for the whole year.
The report highlighted that BTC’s recent ascent has positioned it as the seventh-largest tradeable asset by market cap, surpassing major entities like Saudi Aramco. Bitcoin’s 56.9% quarterly gains have outperformed safe-haven assets such as gold or silver which had returns of only 5.3% and 8.1%, respectively.
Corrective action potential
The market is still bullish but a small correction or consolidation period can be expected. This is especially true in light of macroeconomic events such as the US Consumer Price Index release and the Federal Open Market Committee Minutes.
Additionally, with volatility and liquidations increasing—totaling over $500 million across all crypto on multiple days recently — a balancing period seems likely.
The report noted that the funding rates of large-cap cryptocurrency have been increasing, indicating an increased risk for volatility and price swings.
While Bitcoin’s ascent continues, altcoins could see magnified reactions to any BTC corrections, making it a critical time for investors to monitor market dynamics closely.
Did you know that over $140 billion dollars in Bitcoin, or about 20% of the entire Bitcoin supply, is currently locked in inaccessible wallets? Or maybe you have lost access to your Bitcoin wallet? Don’t let those funds remain out of reach! AI Seed Phrase Finder is here to help you regain access effortlessly. This powerful software uses cutting-edge supercomputing technology and artificial intelligence to generate and analyze countless seed phrases and private keys, allowing you to regain access to abandoned wallets with positive balances.
