Why Altcoins Are Lagging in Bitcoin’s Bull Market Surge

Bitcoin’s recent surge past $111,900 is notable, but altcoins are not following suit. Analysis from Matrixport reveals a significant shift in market dynamics with institutional investors taking the lead while retail activity is down. Unlike 2021, retail ownership of Bitcoin is stagnant and crypto whales are now in control. Analyst Kevin Capital suggests monitoring key price levels for Bitcoin’s future movements, as altcoins may see actions later on.

Bitcoin has crossed the significant threshold of $111,900 recently, but interestingly, altcoins are lagging behind. This observation comes from Matrixport, a prominent crypto firm, which provided insights into why this current bull market feels quite different from that of 2021. The firm’s analysis indicates a shift where institutional investors are playing a crucial role while retail engagement remains notably low.

Matrixport pointed out that despite the rally, many traders miss out on this Bitcoin surge. Traditional retail engagement indicators are stagnant, suggesting that retail investors are largely sitting on the sidelines rather than participating actively in this bull market. This skewed engagement is seen as a key reason behind the relatively subdued funding rates and the poor performance of altcoins compared to Bitcoin.

An important aspect highlighted is that retail traders tend to misjudge market dynamics, often closing positions during abrupt drawdowns, which contributes to their overall losses. Unlike in 2021, the current retail ownership of Bitcoin isn’t expanding—crypto whales now dominate, soaking up most of Bitcoin’s supply. There’s a noticeable decline in retail participation, leading experts like Bloomberg’s Eric Balchunas to suggest this change could be why Bitcoin prices have remained resilient during noticeable corrections.

Matrixport believes understanding the influence of corporate demand on Bitcoin’s behaviour is essential. Currently, we see a quiet handoff of Bitcoin from early adopters, miners, and exchanges to larger institutions like Strategy and BlackRock. They assert that this rally hinges on spot market accumulation, not derivatives, which may further explain the sluggish performance of altcoins.

As for the next steps in this market narrative, analyst Kevin Capital shared some thoughts. He noted that for Bitcoin, a crucial move would be to achieve a weekly close above $106,800. He believes that this will be pivotal for any future price movements. He advises that focusing solely on Bitcoin is the way to go for market participants right now.

However, if that key level isn’t reached, he suggested that it may lead traders back to examining familiar market patterns from 2021. It’s also interesting to note his predictions that altcoins, particularly Dogecoin, might see peaks once Bitcoin’s dominance starts fading in the summer.

As of the latest data, Bitcoin is trading around $108,258—a drop of roughly 2% over the past 24 hours, according to CoinMarketCap. The market remains tense, and all eyes are on how Bitcoin will perform in the coming days.

Meanwhile, Bitcoinist follows a rigorous process to ensure accurate, unbiased reporting, with content reviewed by a skilled editorial team and tech experts. This approach helps maintain the reliability and quality of the information provided.