Altcoin market resilience signals ‘potential regime change’ — Analysts

Altcoins have remained fairly strong despite Bitcoin’s recent downturn, suggesting investors might be adjusting how they safeguard their capital during market uncertainty, analysts say.

“The shift hints at a potential regime change where investors are exploring value in altcoins, diverging from the typical pattern of flocking to Bitcoin during downturns,” analysts from crypto exchange Bitfinex said in a Sept. 9 report.

“Altcoin markets have shown resilience,” it added.

The analysts cited Bitcoin’s (BTC) recent price decline where it went to as low as $52,827 on Sept. 7, a 10.8% drop compared to seven days prior, according to CoinMarketCap data.

Bitcoin has since slightly recovered to $57,001, though it remains below the crucial $60,000 level, which it hasn’t reached since Aug. 30.

They pointed out that amid Bitcoin’s price decline, Bitcoin’s dominance — measuring its share of the crypto market — decreased by 1.3%. However, the market cap of all cryptocurrencies outside the top ten increased by 4.4%.

At the time of publication, Bitcoin’s dominance is 57.33%, down 0.50% over the past week, according to TradingView data. It’s not far off 60%, a level that Benjamin Cowen, founder of Into The CryptoVerse, sees as the “final move” for Bitcoin dominance.

Traders often look for signs that Bitcoin dominance is peaking as a signal to sell Bitcoin and shift capital into alternative assets, such as altcoins.

Meanwhile, the total altcoin Open Interest (OI)  — which represents the total number of contracts that have not been offset or fulfilled by delivery — has dropped 55% from its all-time high, which Bitfinex’s analysts claim signals “speculative apathy and potential exhaustion among sellers.”

Several traders agreed that fewer speculative bets on altcoins suggest the market is getting stronger.

Related: Altcoins at ‘sell your house’ levels amid flashing buy signals, says trader

“The strength altcoins have shown in the latest correction and the bounce with relative low Open Interest pump is signs of sustained strength,” pseudonymous crypto trader Emperor wrote in a Sept. 10 X post.

“Very likely that selection altcoins continue to outperform Bitcoin both towards downside and upside moving forward. The parabolic altcoin phase of the cycle is close. Very close,” Emperor added.

Meanwhile, 360trader opined that the altcoin market cap is “looking very bullish.”

MN Trading founder Michael van de Poppe believes it is a buying opportunity for altcoins, 

“The boring state is the period of accumulation before a new push happens. That’s the current state of the Altcoin markets,” van de Poppe wrote on Sept. 10.

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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.