Unmasking the Tension Escalation Between Bitcoin and Altcoins: No Altseason In Sight

Key Points

• Altcoins have experienced nearly $1 billion in long liquidations since the Bitcoin ETF launch.
• Bitcoin’s dominance has increased, while altcoins like Ethereum, Solana, and Ripple have struggled to keep up.

Bitcoin’s dominance in the crypto market has been highlighted once again as altcoins have faced nearly $1 billion in long liquidations since the Bitcoin ETF launch.

As Bitcoin consolidates demand near new highs, altcoins such as Ethereum, Solana, and Ripple have been unable to keep up. In fact, they have been stuck in a long squeeze loop.

Bitcoin’s Dominance

Bitcoin has been soaking up liquidity and starving altcoins, a common occurrence in a bull market. Even as Bitcoin reached a new all-time high, major cryptocurrencies like Ethereum, Solana, and Ripple couldn’t keep pace.

Before the 2022 bear market, during the 2021 cycle, Bitcoin’s peak was around $69,000 in November, and altcoins followed suit. However, this synchronized upswing is now missing.

Dissecting the Divergence

CryptoQuant’s on-chain metrics show a clear divergence since the launch of the Bitcoin ETF. On Binance, Bitcoin’s Cumulative Liquidation Delta (CLD) shows that shorts got crushed by approximately $190 million, while altcoins experienced long liquidations outpacing shorts by nearly $1 billion.

This indicates that traders were betting big on an “altseason” that never materialized, and paid the price for it. Since December 2024, this gap has only grown wider.

As Bitcoin continues to break new ground, leveraged altcoin bulls are getting liquidated as capital remains confidently locked into Bitcoin.

Altcoins have been stuck in a long squeeze loop, with some even posting double-digit drawdowns. This is because when Bitcoin flirts with local tops or breaks key resistance, capital usually starts to flow into altcoins. However, this time, that rotation was interrupted.

Unless these mega-caps attract organic bid support, a fresh all-time high remains a tall order.