Key Takeaways:
- Bitcoin’s Dominance in the market has fallen since last week and is staying below 60%.
- The static phase of BTC dominance has led to the altcoin surge in the market.
- With the market at its most volatile period, investors are favoring the altcoins in the hope of making a profit in a short period of time.
Following the US Presidential Election and Trump’s victory, Bitcoin exploded in the market. However, during this week the Bitcoin dominance index is staying below 60%. With this development, various altcoins have begun to surge in this highly volatile market. This indicates a change in the community sentiment and the demand shift of investors towards the altcoins. In this article, we will discuss the altcoins and the various factors that are contributing to their sudden surge in the market.
Understanding Bitcoin Dominance
Bitcoin dominance is the percentage of the entire market capitalization that is held by the original cryptocurrency. It is one of the metrics that can be used to understand the state in which the market is present. It can also be used to compare different cryptocurrencies. As the current Bitcoin Dominance has fallen below 60%, we can conclude that various altcoins are on the rise.
When the altcoin dominance increases, it means that the altcoins are slowly rising in the market while Bitcoin remains at its initial value. There are several factors in the market that can influence Bitcoin’s dominance. Some of them include investor sentiment, regulations, adoptions, and supply and demand.
Rise of Altcoins & the influencing factors
With Bitcoin dominance slowly waning in the market, various altcoins are on the rise. Various factors have directly and indirectly contributed to this. Some of these factors are as follows.
- Market Demand
Altcoin price drive can be significantly affected by market demands. Compared to Bitcoin, the altcoins have more ROI. Therefore, investors are most likely to go after the altcoins with higher potential growth. The demand can be mainly affected by community sentiments, market trends, and investors’ confidence.
- Regulatory Policies
Various regulatory policies can play an essential role in the development and growth of altcoins. Governments have the power to impose these restrictions on crypto assets, and these regulations can pose a serious threat to the demand.
- Innovative Projects
Many newly introduced projects have incorporated various advanced technologies and use cases into them. This has appealed to the majority of investors. This has the potential to affect the growth and development of the altcoins.
- Competition In The Market
Competition is one of the key factors that decide the price of a cryptocurrency. Not only that it can also affect the growth and development of a project. If 2 altcoins have similar or the same features, they may struggle to gain momentum in the market.
- Memecoin Supremacy
Memecoins have become a craze in the recent times. The high-risk high-gain investment has attracted a lot of retail investors to these coins. They invest in these coins in the hope of gaining huge profits in a limited time.
Potential Impact Of the Altcoin Surge
The altcoins surge can have a huge impact on the market, especially on the revenue of numerous exchanges. Here are some of the possible outcomes that an altcoin surge can bring to you.
- Increased Trading Activity
During an altcoin surge, there will possibly be an increase in the number of trades that take place in an exchange. So, you will possibly witness a surge in trading activity. This can have a positive and negative influence on the price of the coin due to the market volatility being so high during this period.
- More Chances to Earn
Trading volume can have a serious impact on the price of the coin. It can push the price of the cryptocurrencies to even greater heights. This can be a significant chance to boost your revenue.
- Emergence of Different Trading Pairs
During the altcoin surge, we will see a lot of diverse trading pairs in the market. This is due to the fact that investors try to invest in a lot of cryptocurrencies to increase their chance of earning bug from investments.
Final Remarks
The period where the altcoins surge in the market is widely referred to as the altcoin season. During this period, the chance of earning profit from cryptocurrencies is higher compared to the rest of the time. This is due to the result of increased trading volumes and potential revenues. This time’s altcoin season is no different from the rest of the time.
Two altcoins CLV and SCRT have risen above 130% and 45% respectively in the last 2days for almost 24 hours, enabling a lot of investors to profit from it. It should be noted that after the specified time, the coins had drastically fallen down. So, if you’re looking to profit in the altcoin season, you should be extremely cautious as this is the time when the market is the most volatile.