Shock as Altcoins Lead Crypto Market Rebound as Investors Shift Away from Bitcoin
Analysts say capital is rotating into major altcoins as the cryptocurrency market stages a strong monthly rebound, with Ethereum, Solana, and XRP outperforming Bitcoin in recent sessions.
The total market capitalization of altcoins has surged by nearly $100 billion since early April, according to market data.
Experts suggest this capital inflow could continue, potentially fueling a broader uptrend for digital assets beyond Bitcoin.
The rebound comes amid a wave of improved market sentiment driven by soft U.S. inflation data and a landmark $600 billion trade agreement between the United States and Saudi Arabia, noted crypto trading firm QCP Capital in a Wednesday market update.
Crypto Market Rallies on Risk-On Sentiment
Global equities and cryptocurrencies rebounded overnight as inflation cooled and trade tensions eased.
While the S\&P 500 recovered from a 17% slump in April to post flat year-to-date performance, analysts said the crypto sector was the main driver of market gains.
“We believe there is further room for digital assets to rally,” QCP Capital wrote, adding that Coinbase’s upcoming inclusion in the S\&P 500 could serve as a short-term catalyst for the sector.
Altcoins Lead Crypto Market Rebound as Investors Shift Away from Bitcoin
Altcoins Lead Crypto Market: Altcoins Outperform Bitcoin
Altcoins outpaced Bitcoin following Tuesday’s U.S. Core CPI release, with mixed fund flows seen across cryptocurrency exchange-traded products.
According to SoSoValue data:
Spot Bitcoin ETFs recorded $96.14 million in net outflows.
Spot Ethereum ETFs saw $13.37 million in net inflows.
Ethereum surged 5% over the last 24 hours to surpass $2,600, while Solana (SOL) and XRP each gained nearly 4%. Meanwhile, Bitcoin traded flat at around $103,500 with a marginal 0.1% increase.
The broader altcoin rally was reflected in market dominance metrics.
Data from TradingView showed Bitcoin’s market dominance dropped to 62% from 65% over the past week, a sign that altcoins are closing the gap.
On a monthly basis:
* Ethereum has climbed 58%.
* Solana gained 35%.
* XRP rose 23%.
* Bitcoin, by comparison, advanced 22%.
“Altcoins once again led the broader rally, and the rotation into altcoins remains a key theme,” said Valentin Fournier, Lead Research Analyst at BRN. “Ethereum and Solana are showing continued strength, confirming the thesis that they still have significant room to catch up as Bitcoin consolidates near local highs.”
Analysts Eye Ethereum’s Momentum
QCP Capital attributed Bitcoin’s recent underperformance relative to altcoins to an ongoing “tug-of-war” over its role as both a digital safe-haven asset and a risk-on investment vehicle.
This identity conflict, analysts noted, has left Bitcoin trading in a narrow range, limiting its directional momentum.
“Ethereum, by contrast, appears to be constructing a cleaner story,” QCP analysts observed.
Funding rates remain neutral, and options markets show a preference for protective puts over speculative calls a signal that ETH’s rally is not being driven by excessive risk-taking.
QCP also highlighted early signs of increased demand for longer-dated Ethereum options, suggesting institutional traders may be positioning for ETH to become the market’s next major allocation play.
Mr Author
Author is a renowned crypto writer and podcaster, active in the industry since 2019. Beyond his expertise in cryptocurrency, he has made notable appearances in various media outlets. He presented the BBC's "Big Dollar Giveaway" and the thought-provoking documentary "The Dead Are Not Dead" on BBC World Services. Additionally, Leinhardt has contributed to four international documentaries focused on OneCoin, showcasing his depth of knowledge in the crypto space. His diverse experiences and insights have solidified his position as a respected voice in the cryptocurrency community.
