- Coinbase analysts and a crypto VC expect an altcoin rally after the inauguration
- Analysts cited weakening BTC dominance and capital inflows to altcoins
Analysts believe the crypto market could be positioning itself for a massive altcoin rally after Donald Trump’s inauguration on Monday. In fact, Coinbase analysts noted that the slight drop in Bitcoin’s [BTC] dominance earlier this week drove the latest altcoin pump.
Additionally, the analysts added that traders are positioning themselves for renewed altcoin momentum under the new administration. Part of their weekly market commentary read,
“Meanwhile, the drop in BTC dominance from 58.5% to its support level of 57.3% during the inflation print relief rally on January 15 suggests to us that traders may be positioning for an outsized altcoin market rally on the back of positive catalysts for risk assets and crypto.”
Bitcoin dominance retreats
Chris Burniske, a partner at crypto VC firm Placeholder and former ARK Invest crypto lead, echoed a similar sentiment, citing BTC dominance. He said,
“Importantly for the long tail, $BTC dominance has been slowly fading since late November ’24 – fireworks if that continues.”
Source: X
According to Coinbase analysts David Duong and David Han, stablecoin inflows are another bullish signal for a likely altcoin pump.
They noted strong capital inflows in the space and a huge portion of it went to altcoins as BTC and ETH recorded outflows.
“Stablecoin supply – perhaps the most clear proxy for capital flows to these long tail assets in our view – increased by $1.3B last week, a continuation of trends we’ve observed over the past two months. This stands in contrast to net outflows from US spot BTC and ETH ETFs of $457M and $206M respectively.”
Despite the bullish outlook, however, another indicator – ETH/BTC – didn’t align with the rest, at least at the time of writing. Here, this ratio tracks ETH’s relative performance against BTC, with the same rallying during November’s strong altcoin season.
Source: ETH/BTC, TradingView
In fact, the ratio also hit a new record low of 0.31 at press time. As part of the altcoin sector’s barometer, this doesn’t bode well for the anticipated altcoin rally, especially if the November trend is repeated.
That being said, altcoins like Fartcoin and XRP were the weekly winners, with nearly 100% and 30% gains, respectively. Solana [SOL] also logged 30% gains, while Hedera posted 22% gains.
Here, it’s also worth noting that Hedera and XRP were among the top performers in November’s altcoin run too. It remains to be seen whether they can sustain the momentum this time.
