Bitcoin Dominance Shapes a New Era in the Crypto Market

Why Has Bitcoin’s Dominance Strengthened Significantly?

An analysis of technical data shows a systematic increase in Bitcoin’s influence over the market. Bitcoin dominance, denoted as BTC.D, rose from approximately 40% in 2022 to over 60% by 2025. This rise reflects an additional $900 billion added to Bitcoin’s market value. Meanwhile, the total cryptocurrency market value climbed to $1.11 trillion, with nearly 80% of new capital gravitating towards Bitcoin.

This situation indicates that investors tend to prefer Bitcoin, seen as a “safe haven,” during uncertain times. The increasing institutional interest in spot Bitcoin ETFs in the USA in 2025 further strengthens this trend. Large funds directing their focus towards Bitcoin have become a fundamental factor limiting the liquidity flowing into altcoins.

Shifting Dynamics in the Altcoin Market

The 2021 cycle, in retrospect, presented a classic example of an altcoin season. In that year, Bitcoin’s market value increased by 64%, while TOTAL3 registered an extraordinary 541% rise. Capital swiftly moved from Bitcoin into the broader altcoin market, driving the Altcoin Season Index to its peak. However, this structure proved unsustainable.

In recent years, the sharp increase in altcoin funding rates has led to an accumulation of excessively leveraged long positions in the market. While this may initially seem like a bullish signal, it has, in reality, rendered altcoins extremely fragile. Even limited price movements can trigger cascading liquidations. Additionally, the increasing Bitcoin dominance makes altcoins more vulnerable to severe volatility.

A contemporary update supporting this scenario is that some major exchanges have reduced leverage limits on altcoin futures. Citing excessive volatility and investor risks, exchanges have taken this step, marking a significant signal that the aggressive growth period of the altcoin market might be over.

Consequently, the divergence between Bitcoin and altcoins is not coincidental; rather, it indicates a structural change in the market. Repeating a broad and sustained altcoin season as seen in 2021 appears increasingly challenging under current circumstances. For investors, accurately interpreting this new era is crucial for setting realistic expectations.