- Bitcoin dominance fell from 66% to 60.96%, confirming bearish RSI divergence and leading to altcoin outperformance.
- Ethereum surged by 25.6% weekly, boosted by zkEVM upgrades and ETF growth, pushing ETH/BTC ratio to 0.0318.
- Stablecoin volumes hit $364B, fueling altcoin liquidity as traders rotate capital away from BTC amid new regulatory clarity.
Bitcoin’s market dominance has dropped sharply, confirming a bearish structure and driving fresh momentum across the altcoin sector. After peaking near 66% in early July, Bitcoin’s share of the total crypto market cap now sits at 60.96%, marking a steep reversal from its upward trend that began in January.
Analysts point to a strong bearish divergence and increased capital inflows into altcoins as signs of a shifting market cycle. The second half of the year, historically favorable for altcoins, may now be setting the stage for significant outperformance across the sector.
Sharp Reversal in Dominance Confirms Trend Shift
The reversal in Bitcoin dominance started after a multi-month climb from approximately 52% in January to its recent high near 66%. However, a sharp decline over the past few weeks has erased much of that gain.
A confirmed bearish divergence, highlighted by lower highs in RSI against higher price highs, supports the weakening trend. Bitcoin dominance has fallen decisively below the 64.81% confirmation level.
The RSI has dropped under 50, suggesting bearish momentum. This breakdown is supported by a noticeable increase in volume, indicating stronger market participation in the decline.
Altcoin Rotation Gains Strength
Altcoins are beginning to outperform, according to CoinMarketCap’s Altcoin Season Index, which now stands at 56 out of 100. Ethereum’s 25.6% weekly gain leads the sector, significantly outpacing Bitcoin’s marginal 0.12% increase. Capital rotation into the Ethereum ecosystem appears to be driven by major zkEVM upgrades and rising institutional interest.
Ethereum ETF assets under management rose 20% to $15.7 billion, while Chainlink gained 26.85% amid demand for real-world asset oracles. The ETH/BTC ratio is now at 0.0318, and a move above 0.035 would mark further dominance by ETH.
Stablecoin Liquidity Boosts Market Shift
Stablecoin activity is also accelerating, supporting liquidity for altcoin trading. Weekly volumes hit $364 billion, with the spot-to-perpetual ratio climbing to 0.26, its highest since March.
The GENIUS Act’s progress on a stablecoin regulatory framework is boosting adoption, especially for USDC. Traders are now utilizing stablecoins more to rotate between Bitcoin and altcoins.
As capital rotates out of Bitcoin, the move is reducing its overall market cap share while bringing more liquidity into altcoin markets. Altcoin momentum continues to be robust as Bitcoin dominance continues to decline. The recent breakdown below 64.81% confirms a new phase of sector rotation.
Ethereum upgrades, increasing stablecoin flows, and increased levels of altcoin investment now define the market. Unless Bitcoin suddenly reverses, altcoins appear poised to keep this going throughout the rest of the year.
