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Crypto Investors, Why Are They Moving Away from Bitcoin and Towards Altcoins?

  • After reaching the year’s highs in the market rally in June, BTC is fluctuating in a narrow trading range between $29,000 and $30,000.
  • Bitcoin has further declined due to August being a quiet month. As of the time of writing, it has only seen approximately $131.8 billion in transactions in August.
  • The court decision to remove XRP from the security label emerged based on the expectation that this excitement would cause a wave in the market.

Recently, it can be observed that cryptocurrency investors are showing intense interest in altcoins; Why are traders moving away from Bitcoin?

Investors are Showing Interest in Altcoins

Cryptocurrency

Recently, participants in the crypto market have turned to altcoins due to Bitcoin leaving them with little profit. According to a blockchain analyst, altcoin dominance in terms of trading volume has reached its highest level in the past two years at 78%. In contrast, Bitcoin’s trading volume has experienced a significant decline.

After reaching the year’s highs in the market rally in June, BTC is fluctuating in a narrow trading range between $29,000 and $30,000. This lackluster movement has seriously tested the patience of active traders aiming to convert their crypto assets for quick gains.

It has been revealed that the total amount of BTC on the blockchain has decreased since the peak in March. The June rally, built on hype towards cryptocurrencies with institutional interest, provided a temporary increase and created hopes for higher trading activity.

However, Bitcoin, disappointing all hopes, has further declined due to August being a quiet month. As of the time of writing, it has only seen approximately $131.8 billion in transactions in August. In this context, the amount recorded in March, $1 trillion, was a fraction of it, and less than half of the $345 billion recorded last month.

bitcoin-trading-volume

XRP Leading the Altcoin Rally

Meanwhile, altcoins have become an active area. Major crypto assets such as Ripple, Solana, Cardano, and Polygon have recently seen an increase in volume charts.

Particular emphasis should be placed on the payment-focused cryptocurrency XRP. After the decision made in the heated legal battle against the U.S. Securities and Exchange Commission (SEC), XRP’s strength has increased.

XRP-metrics

As a reminder, after the court decision, XRP increased by 70%, encouraging many XRP investors to sell their assets. In fact, after the event, XRP surpassed Bitcoin in terms of trading volume. Although the XRP movement has largely calmed down, it is still 34% higher than before the decision.

The optimism created by XRP in the market quickly spread to other crypto assets such as SOL, ADA, and MATIC. One of the most important factors behind this shared excitement was that the decision focused on XRP’s status as a “security.”

Like XRP, the SEC had labeled these altcoins as “securities” in a lawsuit against the crypto exchange Binance. This situation dealt a blow to trading activities as worried investors began to sell en masse.

However, the court decision to remove XRP from the security label emerged based on the expectation that this excitement would cause a wave in the market. Clearly, many previous altcoin holders tried to reclaim their assets.

Is Bitcoin Ideal for Active Traders?

Volatility has historically played a significant role for investors who decide to add crypto instruments to their portfolios. These volatile assets have attracted short-term bulls who seek quick gains rather than long-term investments, known for their wild intraday fluctuations.

Recently, however, it is not ordinary Bitcoin but altcoins that have emerged as unique volatile assets. At the time of writing, Bitcoin’s 1-week volatility was significantly lower compared to the volatility of the top altcoins. These developments also drew attention to the diverging sentiments surrounding BTC and altcoins.

XRP-metrics-2

Recently, it has been observed that many traders are withdrawing BTC from the secondary market and holding it. Increased interest from the traditional finance sector, the absence of immediate threats from regulators, and the upcoming halving event have strengthened Bitcoin as a long-term investment.

This means that if you expect to hold for the long term and withstand the challenges of both the traditional finance and crypto worlds, the Bitcoin market is more attractive. If you are in search of quick gains, Bitcoin may not be an ideal option.

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Lucien Renard
Lucien Renardhttps://en.coinotag.com/
Lucien Renard is a 24-year-old writer specializing in cryptocurrency analysis and price action. With a focus on technical analysis, Lucien provides valuable insights into market trends and potential opportunities for investors.
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