- Coinbase analysts and a crypto VC expect an altcoin rally after the inauguration
- Analysts cited the weakening of BTC’s dominance and capital inflows into altcoins
Analysts believe the crypto market could be positioning itself for a massive altcoin rally following Donald Trump’s inauguration on Monday. Coinbase analysts even noted that there was a slight decline Bitcoins [BTC] dominance earlier this week fueled the latest altcoin pump.
Moreover, the analysts added that traders are positioning themselves for renewed altcoin momentum under the new administration. Part of their weekly market commentary read,
“Meanwhile, the drop in BTC dominance from 58.5% to the 57.3% support level during the January 15 inflation relief rally suggests to us that traders may be positioning for an outsized altcoin market rally thanks to positive catalysts for risky assets. and crypto.”
Bitcoin’s dominance is retreating
Chris Burniske, a partner at crypto VC firm Placeholder and former crypto leader of ARK Invest, echoed a similar sentiment, citing BTC’s dominance. He said,
“Importantly for the long tail, $BTC’s dominance has been slowly fading since late November ’24 – fireworks if it continues.”
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According to Coinbase analysts David Duong and David Han, stablecoin inflows are another bullish signal for a likely altcoin pump.
They noticed strong capital inflows into the space and much of it went into altcoins, while BTC and ETH recorded outflows.
“Stablecoin supply – in our view perhaps the clearest indicator of capital flows into these long tail assets – increased by $1.3 billion last week, continuing the trends we have observed over the past two months. This contrasts with net outflows from US spot BTC and ETH ETFs of $457 million and $206 million, respectively.”
However, despite the bullish outlook, another indicator – ETH/BTC – did not match the rest, at least at the time of writing. Here, this ratio tracks the relative performance of ETH versus BTC, with the same increase during the strong altcoin season in November.
Source: ETH/BTC, TradingView
In fact, the ratio also hit a new record low of 0.31 at the time of writing. As part of the barometer of the altcoin sector, this does not bode well for the expected altco rallyespecially if November’s trend repeats.
That said, altcoins like Fartcoin and XRP were the weekly winners, gaining almost 100% and 30% respectively. Solana [SOL] also posted a 30% gain, while Hedera posted a 22% gain.
Here it is also worth noting that Hedera and XRP were also among the top performers during November’s altcoin run. It remains to be seen if they can keep the momentum going this time.