Bitcoin bull run triggers the ebb tide of altcoin season

In the world of cryptocurrency, Bitcoin has always been a bellwether of the market. Whenever the price of Bitcoin soars, it often triggers a bull market trend and attracts the attention of investors. However, with the strong performance of Bitcoin, the altcoin season often faces a decline. This phenomenon has attracted the attention and discussion of many investors. This article will explore from multiple perspectives how the Bitcoin bull market leads to the decline of the altcoin season, and analyze the reasons, impacts and future trends.

First, Bitcoin's unique position makes it dominant in the market. As the earliest cryptocurrency, Bitcoin not only has a brand effect, but also has gained wide recognition. When the market is generally bullish, investors tend to prioritize their funds in Bitcoin in pursuit of higher returns. Take 2021 as an example. Bitcoin reached a record high in April, with a market value of over $1 trillion, attracting a large number of new investors. In this case, the performance of altcoins is often suppressed, and capital outflows are common.

Secondly, market psychology is also an important factor affecting the altcoin season. During the Bitcoin bull market, investors tend to have great expectations for its future performance, and this optimism will also lead to a decrease in their interest in other altcoins. Ethereum, as the second largest cryptocurrency, also performed well during the Bitcoin bull market, but its growth was relatively limited compared to Bitcoin. For example, in May 2021, the price of Bitcoin reached $64,500, and although Ethereum also broke through $4,000, its growth rate was obviously not comparable to Bitcoin. When choosing investment targets, investors will naturally tend to choose Bitcoin, which has performed more prominently, which puts many altcoins in an embarrassing situation during the bull market.

Third, technological innovation and market competition have also exacerbated the decline of altcoins to a certain extent. Against the backdrop of the Bitcoin bull market, some emerging technologies and projects have continued to emerge, attracting the attention of investors. For example, the rise of decentralized finance (DeFi) and non-fungible tokens (NFTs) has made many investors look forward to these emerging projects. Although these projects are technically attractive, in the atmosphere of the bull market, investors often choose to concentrate their funds on mainstream currencies such as Bitcoin, while ignoring other altcoins with great potential. This phenomenon has become increasingly obvious in the market, leading to the decline of many altcoin seasons.

In addition, market volatility is also an important reason for the decline of altcoins. The cryptocurrency market itself has high volatility, and the arrival of the Bitcoin bull market has exacerbated this phenomenon. During the bull market, the prices of many altcoins fluctuated greatly, bringing higher risks to investors. For example, some altcoins may rise several times in a short period of time, but may fall back quickly in the subsequent adjustments, causing panic and losses to investors. Faced with such a market environment, many investors choose to withdraw funds from altcoins and invest in Bitcoin to reduce risks, further exacerbating the decline of altcoins.

After analyzing the impact of the Bitcoin bull market on the fading of the altcoin season, we also need to pay attention to the underlying reasons for this phenomenon. First, the maturity of the market and the level of investor awareness are constantly improving. With the development of the cryptocurrency market, more and more investors are beginning to realize the scarcity and value storage characteristics of Bitcoin. In this case, investors are more inclined to invest their funds in Bitcoin rather than other altcoins. Bitcoin's market leadership has also, to a certain extent, prompted investors to regard it as "digital gold," thereby ignoring the potential of other altcoins.

Secondly, changes in regulatory policies have also had an impact on the fading of the altcoin season. In recent years, global regulation of cryptocurrencies has been increasingly strengthened, and many countries have begun to strictly review altcoin projects. This policy change has exposed many altcoins to compliance risks, leading to a decline in investor confidence in them. In the context of the Bitcoin bull market, investors are more willing to choose mainstream currencies that have been approved by regulators and ignore those altcoins with higher risks. This phenomenon has accelerated the fading of the altcoin season to a certain extent.

It is worth noting that the decline of altcoins does not mean that their value is completely lost. On the contrary, in the context of the Bitcoin bull market, many altcoins still have certain investment value. As the market continues to evolve, new opportunities and challenges will emerge. Some altcoins may rise again in the future, especially driven by technological innovation and market demand. For example, with the popularity of decentralized finance, some DeFi-related altcoins may usher in new growth opportunities. Therefore, when choosing investment targets, investors should keep an open mind, pay attention to market dynamics, and adjust investment strategies in a timely manner.

In summary, the fading of the altcoin season caused by the Bitcoin bull market is a complex market phenomenon, involving the interweaving of multiple factors such as investor psychology, market competition, technological innovation, and regulatory policies. Although the performance of altcoins is often unsatisfactory during the bull market, it does not mean that they have no future. Investors should flexibly adjust their investment strategies according to market dynamics and seize potential investment opportunities. In this ever-changing cryptocurrency market, only by continuous learning and adaptation can we remain invincible in an environment where opportunities and risks coexist.

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Every $1 increase in the price of Bitcoin is a testament to its value in the cryptocurrency pie. Although there are more than 2,000 cryptocurrencies on the market, Bitcoin’s market capitalization share of the entire crypto market highlights its undeniable importance.
According to cryptocurrency data analysis company CoinGecko
In the October report, only one of the top cryptocurrencies by market capitalization increased its market share. In the past month, Bitcoin's market capitalization has increased by 4.5%, totaling more than $2 billion, and its price has risen by more than 12% this month.
From this perspective, no other major cryptocurrency has grown in market share. In fact, most of the top altcoins have fallen. For example, as of October 31, ETH
It holds 11.5% of the market share, down 1.3% from the previous month. Other altcoins with declining market share include Tether (USDT),
Coin (BNB) and Ripple (XRP), and the upcoming hard fork Bitcoin Cash (BCH) and
Chainlink (LINK)'s market capitalization has not changed.
Crypto market capitalization share from September to October, source: Coingecko
In the above report, Coingecko pointed out that the “handover” of altcoin market share to Bitcoin may be a sign that the Bitcoin bull run has led to the fading of the altcoin season. The report stated:
“This could be a sign that the altcoin cycle is slowing as investors shift back toward Bitcoin in their portfolio allocations.”
Ethereum’s concession to Bitcoin is more of a recent theme. Back in the first quarter of 2020, ETH’s market share grew by 0.8% to 8.47%, while Bitcoin’s market share was
67.8%. Bitcoin was at $7,200 at the beginning of the year and then fell to $5,500. In the first quarter, Bitcoin lost 3.5% of the entire crypto market
Meanwhile, Tether was the biggest winner with a 1.1% market share, likely benefiting from increased demand for storing stablecoins rather than volatile cryptocurrencies.
In the second quarter, from April to June, Bitcoin’s market capitalization share increased by 0.3%, while Ethereum’s market capitalization share increased the most, reaching 1.6%. However, other major altcoins including XRP, BCH, BSV and LTC lost market share.
In the third quarter, from July to September, price increases did not boost Bitcoin’s market share, and as prices initially strengthened and then fell, Bitcoin lost 6.6% of the total market share.
It remained at around $400, and its market capitalization share increased by 2.3%. Bitcoin's market share was occupied by most altcoins, accounting for 2.3%, including exchange platform coins (BNB) and stablecoins (USDT).
In general, in terms of market capitalization, Bitcoin has reached its highest point in June. As the price of BTC hits a nearly two-year high and altcoins perform flat, this cake will be increasingly "eaten" by Bitcoin.