Bitcoin’s grip on the crypto market is tightening once more, and the numbers behind that shift assist clarify why a broad basket of altcoins is unlikely to beat the highest crypto.
Information from CoinMarketCap point out that Bitcoin’s dominance is edging upwards in direction of 60% of the entire crypto market capitalization. Compared, altcoins’ dominance has been trending downwards within the present market cycle.
On the identical time, the Altcoin Season Index reads 41, indicating a Bitcoin-led market slightly than the broad rotation that sometimes lifts most tokens concurrently. The numbers have remained under the 75-plus threshold that sometimes alerts a broad-based rotation into smaller property since final September
This means that whereas retail merchants favor rotating Bitcoin earnings into speculative tokens, they’ve needed to cope with a bear market that has not afforded any asset the chance to shine.
In gentle of this, there was little deal with altcoins. As a substitute, the market has been characterised by a special cycle the place at the moment’s marginal patrons don’t put money into obscure tokens as a result of they’re solely curious about Bitcoin’s distinctive traits.
Institutional flows favor liquidity and security
Essentially the most important shift in cryptocurrency for the reason that final traditional altcoin season is the fast progress of regulated infrastructure and institutional entry factors.
Bitcoin now has mainstream distribution mechanisms, corresponding to spot exchange-traded funds and institutional custody merchandise, designed for big allocators. These allocators prioritize deep liquidity, minimal slippage, and safety from headline threat.
Giant capital allocators hardly ever deploy a scattered technique throughout dozens of tokens. As a substitute, they buy what clears their inner threat committees.
This normally means deciding on the asset with the longest historical past, the deepest liquidity, and the clearest market positioning.
Even when institutional traders search publicity to the broader cryptocurrency market, they sometimes start with Bitcoin and broaden solely later.
Latest fund circulation information illustrates a powerful bias towards high quality over speculative altcoins.
In line with CoinShares weekly report, cryptocurrency funding merchandise logged a fourth consecutive week of outflows. These outflows totaled $3.74 billion over 4 weeks, together with $173 million within the newest week alone.
Bitcoin and Ethereum had been the first sources of those redemptions, with losses of $133 million and $85.1 million, respectively.
Concurrently, a handful of main various tokens noticed inflows, with XRP gaining $33.4 million and Solana including $31 million.
This selective circulation signifies that traders should not chasing a broad altcoin rally. They’re selecting a number of liquid names whereas remaining extremely defensive.
A historic imbalance in provide and demand
Altcoins face important headwinds resulting from an unprecedented mixture of intense promoting strain and substantial token dilution.
Information from CryptoQuant point out that the cumulative buy-and-sell distinction for altcoins (excluding Bitcoin and Ethereum) stands at -$209 billion over the 13 months since January 2025. The final time demand matched provide was close to zero in early 2025.
Since then, the market has moved strictly in a single route. This extended web promoting on centralized change spot markets signifies an entire absence of institutional accumulation for smaller tokens.
The -$209 billion determine doesn’t essentially sign a market backside. Somewhat, it merely means the patrons have vanished.
A significant component driving this collapse is the sheer quantity of latest property.
A report from crypto pockets maker Tangem indicated that greater than 120 million distinctive tokens had been created as of February 2025, in contrast with fewer than 500 tokens a decade earlier.
This exhibits that too many tokens are competing for a market share that has not expanded basically. The dynamics render any potential restoration extremely fragile and threaten the survival of low-cap tokens.
Furthermore, a few of these property persistently schedule token unlocks, additional compounding this situation.
Token unlocks add new provide on mounted dates, no matter market sentiment. In truth, a Keyrock research signifies that 90% of those occasions exert unfavorable value strain, with declines typically starting roughly 30 days earlier than the scheduled launch.
Bitcoin has no scheduled dilution, making it a cleaner maintain for traders looking for to keep away from looming provide overhangs over a one-year horizon.
Buying and selling volumes sign a flight to high quality on this bear market
Market specialists have famous that the cryptocurrency business is in a bear market, which has pulled Bitcoin value inside a spread between $65,000 and $72,000.
Throughout deep corrections or the late phases of bear markets, traders sometimes rotate their capital towards the flagship digital asset whereas abandoning altcoins.
Information from CryptoQuant point out that this habits is clear in buying and selling volumes on Binance, the most important change available in the market.
As Bitcoin moved again above $60,000, a notable change within the distribution of buying and selling quantity emerged.
On Feb. 7, Bitcoin buying and selling quantity on Binance regained dominance, accounting for 36.8% of whole change quantity. Compared, altcoins represented 35.3% of the quantity, and Ethereum accounted for 27.8%.
This quantity confirmed that altcoin buying and selling exercise has suffered essentially the most throughout this downturn.
In November, altcoins accounted for 59.2% of Binance’s buying and selling quantity. By Feb. 13, their share had fallen to 33.6%, representing an virtually 50% contraction in exercise.
This sample of capital flight has appeared repeatedly throughout earlier corrective phases, notably in April 2025, August 2024, and October 2022.
In periods of elevated uncertainty and market stress, traders naturally gravitate towards Bitcoin.
Altcoins trillion-dollar rotation to Bitcoin
Market specialists have famous that the timeline for the top of the present bear market stays extremely unsure.
But, if historic patterns maintain true, the following three to 4 months may set off an enormous capital rotation from the obscure tokens into BTC.
On this state of affairs, analysts at CEX.io venture that between $740 billion and $1.2 trillion in buying and selling quantity may shift from altcoins into Bitcoin.
In a conservative state of affairs, Bitcoin’s quantity share would improve by 5%-6%, bringing its whole share to 46%. This assumes the entire market quantity declines by 10% to fifteen%.
Nevertheless, an elevated state of affairs suggests an 8%-9% improve in Bitcoin’s quantity share, pushing it to 49% and leading to a $1.2 trillion rotation.
It is because present market situations carefully mirror these of the 2022 bear market, when Bitcoin’s quantity share rose by 13.5% over 4 months. Notably, The same 13.6% improve occurred in mid-2018.
CEX.io analysts informed CryptoSlate that whereas a full 13.5% soar is much less seemingly now, given Bitcoin’s present quantity dominance of 40%, there stays substantial room for additional consolidation.
In line with them:
“Usually, the larger the decline in general crypto buying and selling quantity, the larger the achieve in market share Bitcoin can obtain. As an illustration, in 2022, whole month-to-month quantity declined by roughly 17% through the Could-September interval. In flip, the present level in Bitcoin’s quantity dominance (40%) is notably increased than in 2018 and 2022, suggesting rotation has already begun. But it stays effectively under the 42-46% peaks seen throughout intense rotation phases, indicating substantial room for additional consolidation.”
