Bitcoin Price Crushing Altcoins Heading Into U.S. Election. Is There an Alt Rally Coming After?

Bitcoin’s

(BTC)
grip
on
the
whole
digital
asset
class
rose
to
a
fresh
3.5-year
high
on
Tuesday
as
alternative
cryptocurrencies,
or
altcoins
continued
to
struggle
against
the
leading
crypto
with
the
U.S.
election
looming
over
the
market.

While
BTC
was
down
less
than
4%
from
last
week’s
near-record
high
of
over
$73,000,
large-cap
altcoins
like
Ethereum’s
ether

(ETH)
and
Solana’s
native
token

(SOL)
both
dropped
nearly
10%
from
their
recent
highs.
The
broad-market
CoinDesk
20
declined
nearly
6%

Smaller
cryptos
fared
even
worse,
as
the
combined
market
capitalization
of
altcoins
excluding
the
top
10
largest
cryptos,
shown
as
OTHERS
on
TradingView,
plummeted
to
the
lowest
relative
to
bitcoin
since
early
2021.

The
price
action
propelled
bitcoin’s
market
cap
dominance,
which
measures
BTC’s
share
of
the
total
crypto
market
capitalization,
to
60.6%,
its
strongest
level
since
April
2021.

“Altcoins
are
now
seeing
severe
drawdowns
whenever
BTC
pulls
back,”
Bitfinex
analysts
said
in
a

Monday
report.

“With
BTC
absorbing
most
of
the
capital
flow
into
crypto
assets,
altcoins
are
struggling
to
keep
up,
and
without
a
fresh
catalyst,
their
prospects
for
a
comeback
in
the
near-term
appear
slim,”
the
authors
added.

Speculative
interest
that
supported
altcoin
outperformance
during
brief
periods
have
vanished,
as
funding
rates
on
perpetual
futures
markets
normalized,
the
report
noted.

Bitcoin’s
winning
streak
against
alts
may
continue
for
a
while,
Bitfinex
analysts
forecasted.

“We
believe
that
the
altcoin
market
may
experience
further
declines
relative
to
bitcoin
in
the
mid-term,
primarily
due
to
the
apathy
of
speculators.”

“Bitcoin’s
attributes
and
wide
availability
position
it
to
thrive
in
the
medium
term,
regardless
of
the
[U.S.
election]
outcome,”
K33
Research
analysts
Vetle
Lunde
and
David
Zimmerman
said.
“For
altcoins,
the
election
is
more
sensitive,”

“This
implies
that
the
medium-term
path
dependency
in
alts
should
be
more
sensitive
to
the
election
than
BTC,”
they
added.

The
elections,
and
the
uncertainty
around
the
outcome
weighing
on
the
market,
might
as
well
be
the
inflection
point
for
altcoins
starting
to
catch
up
with
bitcoin,
according
to
David
Duong,
head
of
research
at
Coinbase.

“I
would
expect
bitcoin
dominance
to
start
to
kind
of
plateau
here
as
altcoin
names
are
probably
going
to
take
more
of
a
front
seat
due
to
the
fact
that
people
are
going
to
play
them
more
because
of
the
elections,”
said
Duong
in
an
interview
with
CoinDesk.

He
said
the
election
will
be
a
catalyst
for
crypto
prices
but
likely
won’t
have
an
outsized
impact,
as
favorable
macro
conditions
will
provide
a
tailwind
to
the
whole
asset
class.

“I
would
actually
say
I’m
fairly
optimistic
through
probably
early
to
first
half
of
the
first
quarter
of
2025,
in
part
because
I
think
we’re
in
a
very
strong
macro
environment
and
it’s
been
very
favorable,”
he
said.
“I
do
think
that
we’re
gonna
see
us
benefit
from
the
elections
as
well,
regardless
of
who
wins.”