Bitcoin's falling market dominance is benefiting altcoins
The persistent lack of direction in Bitcoin's price (BTC), coupled with a shrinking market dominance of the cryptocurrency, triggered price rallies in many altcoins during the past trading week.
The persistent lack of direction in Bitcoin's price (BTC), combined with a diminishing market dominance of the cryptocurrency, sparked price rallies in many altcoins during the past trading week.
The cryptocurrency market correction for Bitcoin remains in full swing. While Bitcoin is currently stabilizing above last week's lows around $19,500, the recent sharp drop in trading volume points more and more to a continued price decline in the days ahead.
For the first time in crypto market history, Ethereum's (ETH) August futures volume has surpassed Bitcoin's, according to analytics firm The Block. In the weeks leading up to "The Merge," investors piled into the second-largest cryptocurrency to profit from the upgrade to Ethereum 2.0. This has led Ethereum to overtake Bitcoin by about 80 percentage points in the past few months.
Ethereum's relative strength is the main reason Bitcoin's dominance has fallen to around 39.61%. Other altcoins, however, like Cosmos Hub (ATOM) and Chainlink (LINK), are also benefiting from Bitcoin's weakness and have posted double-digit gains over the last seven trading days. In hindsight, it seems that projects like Cardano (ADA) with the upcoming Vasil hard fork or Aave (AAVE) with the launch of their own stablecoin are in line for major ecosystem upgrades in the near term.
This coming ECB rate hike on Thursday is also expected to be highly relevant for crypto price action in the days ahead. If the ECB raises its key rate more than expected, a drop in Bitcoin and co.'s prices could follow.
Price moves of the top 10 altcoins
A look at the top 10 altcoins shows a mixed picture. Six of the ten managed to gain in weekly terms. Leading the gainers is Cardano (ADA) with a 14% price rise, followed by Polygon (MATIC) up 10 percentage points.
Ethereum (ETH) and Polkadot (DOT) follow with gains of just over 9 percentage points. Interestingly, Shiba Inu (SHIB) also managed a rebound of just over 4%. On the flip side, the other meme coin in the top 10, Dogecoin (DOGE), slipped about 1%. Binance Coin (BNB) was also one of the few laggards, down by 1%.
Stability of the Top 10
The ongoing sideways phase and Bitcoin's falling market dominance have seen investors boost allocations to other major cryptos over the past week.
As long as Bitcoin can't decisively reclaim the high near USD 20,600 and near-term market share continues to erode, the outperformance of other top-10 cryptos could persist.
If Bitcoin breaks below USD 19,892 on a daily close in the coming days, the first meaningful support around USD 18,950 would come into view for investors. Looking at the top-10 altcoin rankings, there were no changes to last week's lineup.
Week's winners and losers
After two corrective weeks, during which the vast majority of the top-100 altcoins fell in value—some substantially—there is now a broad price rebound.
Around 60% of the 100 largest cryptocurrencies show a weekly price gain. The weekly winner list is led by DeFiChain (DFI) with a 37% price rise. Even before the significant price jump, a DFI bottom was noted in a recent price analysis.
Celsius Network (CEL) has also stabilized after a massive sell-off in prior weeks and rose 27% over the week. Given a more than 60% drop in recent weeks and ongoing insolvency uncertainty, long-term investments are not advised for now.
Investors are betting on 'buy the rumor'
Bullish is also the price of Lido DAO (LDO), which benefits from persistent strong demand for Ethereum 2.0 staking offerings.
Interestingly, Cosmos Hub (ATOM) (+20%), Chainlink (LINK) (+13%), and Aave (AAVE) (+11%) are three other cryptos up in double digits, and like Ethereum, they’re also seeing timely major updates.
Evmos (EVMOS) is again rising, up about 11%, making it one of the week's biggest gainers for the third consecutive trading week.
Relatively small dips among weekly losers
The weekly losers list is led by Helium (HNT) by a wide margin. After hints of a transition of its Custom Blockchain to the Solana Blockchain, investors appear disappointed and are selling HNT. HNT fell 32% on the week.
Chain (XCN) also trends lower, down 14%, and eCash (XEC) down 11%. After a strong showing last week, the eCash price corrected due to increased profit-taking.
