Bitcoin market dominance has recently dwindled in favor of the altcoin market. Trading data from more than 25 cryptocurrency exchanges indicates that investors are opting out of their Bitcoin positions and placing their bets in altcoins.
The level of altcoin interest in the overall market has risen to the top for the first time since April this year. It seems that the renewed interest in the altcoin market is sparked by the Ripple ruling.
Kaiko Research report has revealed that Bitcoin market dominance has dropped by 8% for the second time during the same year. The report also suggested that the latest altcoin rally was initiated by increasing positions in XRP tokens among major gainers such as Matic, Solana, and XLM among others.
On the other hand, Bitcoin market dominance has dropped to its lowest in months. The total drop is predicted to be around 27% across a multitude of cryptocurrency exchanges. Such numbers have not appeared in the market since April earlier this year.
Kaiko analytics have interjected that at present most investors are excited about the ongoing altcoin rally that has been initiated by the XRP. However, the firm has warned the investors that the rally is not going to sustain for a longer duration.
The analyst named Dessislava Laneva has maintained that even though several altcoins are rallying at present, the rally might not continue since the average trading volume in the altcoin markets remains lower compared to 2020-2021 readings.
She revealed that buying pressure has continued to drop in the United States. In addition, she also claimed that overall liquidity is expected to continue depleting. The true effect of the XRP ruling is going to play out in the next few months. She maintained that at present both Bitcoin and altcoin metrics are volatile.
She also claimed that the markets do not have a clear direction or inclination in either bullish or bearish directions. She also talked about the US government and Bitcoin miners opting to sell a massive amount of Bitcoins back into circulation.
XRP Gains Momentum
The Kaiko analyst also claims that the XRP token has gained massive momentum within and outside of the United States’ jurisdiction. The firm has maintained that Korean markets that have reported massive altcoin trading volumes have become the second largest place for XRP token activity since the ruling.
These metrics indicate that whales and retail investors have shown a visible interest in purchasing the Ripple native cryptocurrency.
On the other hand, the long-term outlook for Bitcoin has improved as per Laneva. She maintained that the coin is going to benefit from the new inflows generated by the ETF spot filings. However, there is only the wait for approval by the SEC. At the same time, investors are also looking to make gains from the halving event set to take place in April next year.
She also claimed that there is a possibility for a dovish response from the Federal Reserve as inflation has become under control and the tightening cycle has reached its peak. The Fed interest verdict will be announced this week followed by the same from European Central Bank.