- Bitcoin maintained its dominant position in the cryptocurrency market during the second quarter of the year, attracting flows from altcoins. However, after the recent Ripple decision, market dominance has decreased.
- Following Ripple’s partial victory against the U.S. Securities and Exchange Commission (SEC), Bitcoin’s dominance dropped below 50%.
- Gordon Grant, the trading director of Genesis Trading, said, “Bitcoin had a good 2nd quarter, so people will focus on credit and the risk curve.”
Bitcoin maintained its dominant position and dominance in Q2 of the year, but the latest XRP decision could create a shift in Q3.
XRP Decision Could Launch An Altcoin Bull In Q3
Bitcoin remained dominant in the cryptocurrency market during the second quarter of the year, attracting flows from altcoins. However, after the recent Ripple decision, market dominance has decreased, making room for altcoins. Now, an analyst suggests that signs of an altcoin season are emerging in the 3rd quarter.
Gordon Grant, the trading director of Genesis Trading, said, “There are signs of an altcoin season in the 3rd quarter,” and added:
“When we look at risk proxies where altcoins perform well, one of them is the Nasdaq index, and the Nasdaq is moving towards its all-time high. Altcoins perform well when Nasdaq rises.”
The U.S. tech-heavy Nasdaq index has risen by 38% since the beginning of 2023. It currently stands at 14,063 points and is approaching its all-time high of 15,498 points in April 2021.
Grant said, “Bitcoin had a good 2nd quarter, so people will focus on credit and the risk curve,” and added, “They made good profits in Bitcoin, and now they will move some of it to Ethereum, then to riskier altcoins. It’s a pattern.”
Bitcoin Dominance Decreases
Following Ripple’s partial victory against the U.S. Securities and Exchange Commission (SEC), Bitcoin’s dominance dropped below 50%. Judge Analisa Torres, who presided over the case, ruled that XRP is not a security when sold on exchanges. However, the federal judge approved the SEC’s request concerning XRP’s institutional sales.
According to data, Bitcoin’s dominance is currently at 49.85%. The world’s largest digital asset had surpassed the 50% dominance line with a series of applications for spot Bitcoin ETFs from major financial firms. The dominance of the digital asset was around 52% after the Ripple vs. SEC decision. After the decision, XRP almost doubled in value, becoming the fourth-largest crypto asset. Other altcoins such as Ethereum, Cardano, Solana, Polygon, and Stellar also saw double-digit growth.
“Altcoin Season May Have Started”
CryptoQuant claimed in its report that the decrease in Bitcoin’s market dominance indicates the beginning of an altcoin season. However, despite the positive XRP ruling, the derivatives markets still have a negative sentiment among traders.
The report claimed, “The decrease in Bitcoin’s market value dominance indicates the possible start of an altcoin season,” and added:
“However, looking at the derivatives markets, traders still have a negative sentiment despite the XRP decision.”
“These can only be positive for real community memecoins”
A quarterly report highlighted the gains achieved by various memecoins in May 2023. Pepe led with a 1813% return. It reached a market cap of $1.8 billion after being listed on Binance. However, since then, the memecoin has dropped by 65% from its early May high.
Eggar, a web3 consultant at The Egg Consultancy, predicts that memecoins will see some of this capital inflow as altcoin trading volume increases. He said:
“If the volume in altcoins really starts to pick up, as it always does, people who have made profits will likely convert some of their capital gains into assets further down the risk curve.”
Gordon Grant suggested that there might be a memecoin rally following the altcoin surge, but there could be a delay: “As long as there is liquidity in the crypto ecosystem, memes always have that potential, but it takes time to realize those gains.”
