There is no denying that altcoins have been outperforming Bitcoin since the launch of spot-Bitcoin exchange-traded funds last week. As calls for altseason intensify, analysts are postulating that the ETF launches could be good news for altcoins.
Bitcoin prices corrected 14% in the days that followed the highly anticipated launch of spot ETFs in the United States. However, altcoins have largely remained resilient, holding on to their recent gains.
Low BTC Volatility Good for Altcoins
On January 17, Andrew Kang, co-founder of crypto venture capital firm Mechanism Capital, said the Bitcoin ETF launch is good for BTC, “but actually much better for altcoins.”
He said that volatility for Bitcoin will fall now that institutions are involved, and gains will be slow and steady.
“The Goldilocks scenario for altcoins is when BTC goes up slowly over the span of months and years.”
There will be few, if any, double-digit intraday swings, he said before adding, “most days will be up, but not up that much relative to the early glory days.”
“BTC will offer too little volatility to interest many traders but a grind up creates confidence in an upward trajectory for the crypto market.”
This will result in “continued comfort and allocation down the risk curve,” he said.
Read more: 13 Best Altcoins To Invest In January 2024
Furthermore, Bitcoin dominance has declined by 6% since the ETFs were launched last week.
According to TradingView, BTC’s market share is currently just under 51%. Since May 2017, when the first major wave of altcoins took over the crypto industry, Bitcoin dominance has gone sideways in a range of 40%-70%. Kang predicted that BTC dominance would fall back to 40% this year.
Additionally, on-chain analyst “Negentropic” exclaimed, “Altcoins are ready to fly!” on January 16.
He noted that markets have had a period of consolidation after the “break-up of the rounding bottom formation,” and the next phase is acceleration.
“This is where the altcoin season sends crypto flying. The market will double and triple in a matter of a few weeks to months.”
Crypto Markets Up 1.4%
Total capitalization, including BTC, is currently $1.78 trillion, following a 1.4% gain on the day. However, Bitcoin has barely moved, and altcoins are the ones driving momentum yet again.
Ethereum has made 2.2% on the day to trade at $2,578 at the time of writing. Moreover, Solana (SOL) had reclaimed $100 following a 4.6% increase.
Chainlink (LINK) was also performing well, gaining 3.3% on the day to reach $15.75.
However, analysts have predicted a market correction in the wake of the Bitcoin ETF approvals.
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