While the crypto markets started 2023 with a positive outlook, Bitcoin tested $19,000 by making its highest daily jump with a 5% increase in the recovery trend yesterday. Ethereum, on the other hand, stepped into the $1,400 band with an increase of close to 2%. While the two biggest cryptocurrencies dominating the market continued their upward trend, the activity in the altcoin market started to draw attention.
According to CryptoQuant valuations, there is a remarkable increase in trading volume dominance in the altcoin market. So much so that altcoin trading volume rose to 64%, its highest level since last year. The analytics firm calculates altcoin trading volume dominance by dividing a crypto asset’s trading volume by its total market cap.
“Altcoin Trading Dominance (%) at highest point since Jan ’21
“The message was clear: this is very concerning. And that view hasn’t changed at all.” by @JA_Maartun”
Despite the bullish trend in Bitcoin, the trading volume of BTC has decreased compared to the altcoin market in recent days. This momentum can be explained by the fact that investors currently find altcoin trading more profitable. Bitcoin and Ethereum started 2023 with below average transaction volume, according to CryptoQuant data. It was reported that BTC transaction dominance dropped to 16%, the lowest level since last year.
CryptoQuant analyst pointed out that the upward momentum was not sustainable during periods of increased altcoin dominance, and referring to the long-term outlook, pointed out that the stable uptrend started with the increase in Bitcoin dominance. As a result, as the altcoin market is generally more volatile, it was mentioned that an increase in Bitcoin transaction volumes is needed for the market recovery to return to a more stable state. Otherwise, the assumption is made that the current situation may result in sales pressure.