Bitcoin News Today: Institutional Capital Flees Bitcoin, Backs Altcoin Surge

Bitcoin’s market dominance has dipped to near 55.50%, signaling a shift in the cryptocurrency landscape as Ethereum gains traction. This decline marks a significant shift from Bitcoin’s cycle high of 66.30% on June 27 and continued downward throughout August. Analysts suggest that Bitcoin may be nearing the end of a correctional wave, potentially setting the stage for a bounce in September. The wave structure of Bitcoin’s dominance (BTCD) indicates that it is completing wave C of an A-B-C correction, with momentum indicators like the RSI and MACD approaching potential bullish divergences. A rebound at the 57% level could confirm the completion of this correction pattern.

In contrast, Ethereum’s dominance has surged, reaching new highs in recent months. However, technical indicators suggest that Ethereum may be nearing a top. The dominance chart for Ethereum has formed an ascending wedge pattern, a classic bearish formation, while also reaching a key resistance level at 14.67%. Bearish divergences in both the RSI and MACD further support the idea that Ethereum’s upward momentum could be running out of steam. Analysts are watching closely for signs that Ethereum may soon consolidate or pull back, making room for Bitcoin to regain dominance.

The shift in institutional investor sentiment is also evident through ETF inflows. Ethereum ETFs have seen consistent inflows, surpassing Bitcoin ETFs in recent weeks, which have even experienced outflows. This divergence in institutional investment patterns reflects a growing preference for Ethereum in the current market environment. Ethereum ETF balances have nearly doubled in the past two months, compared to a more gradual increase in Bitcoin ETF balances during its recent rally. These trends underscore a broader rotation of capital from Bitcoin to Ethereum and other altcoins, a dynamic often seen during altcoin seasons.

The Altcoin Season Index, currently at 53 out of 100, has been on an upward trajectory since April, indicating that the market is moving into a phase where smaller cryptocurrencies may outperform Bitcoin. This period is typically characterized by a drop in Bitcoin dominance and a surge in interest in alternative assets. With Bitcoin’s ADX at 17—signaling weak directional movement—and Ethereum’s ADX at 36, suggesting a strong trend, the conditions appear favorable for a market rotation toward altcoins. Institutional inflows and improved macroeconomic conditions are reinforcing this shift, creating an environment where altcoins could continue to outperform.

Looking ahead, the technical and institutional signals point to a potential resumption of Bitcoin’s uptrend in September. A bounce in Bitcoin dominance, combined with a consolidation or pullback in Ethereum, could create a favorable environment for Bitcoin to reclaim its position as the leading cryptocurrency. Meanwhile, altcoins like Cronos (CRO) are already demonstrating significant gains, fueled by strategic partnerships and strong technical indicators. As the market continues to evolve, investors are closely monitoring key levels and indicators to determine the direction of the next major price movements.

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