Bitcoin has regained the $92,000 level after a $2 billion liquidation wave. Both investors and traders in the market are increasingly focusing on larger cryptocurrencies. The market dominance of Bitcoin and Ethereum remains high; this indicates that established digital assets are preferred during periods of economic uncertainty.
The compressed base rates and decreasing amount of open positions in the market highlight the price stagnation in the cryptocurrency market. As a result, both institutional and individual investors are directing their capital towards stronger assets, and appetite for leveraged trades is decreasing.
The Market Focus Shifted to Bitcoin and Ethereum
Cryptocurrency traders are gravitating towards major coins. Bitcoin's market dominance currently holds 59.11% of the total market value among major cryptocurrencies. Ethereum's dominance is at 12.80%; this rate has been fluctuating in a narrow band between 12.78% and 12.81% in recent days.
According to Wintermute's latest market update, this transition to major coins shows that selective risk-taking has come to the forefront in the overall market outlook. In other words, traders are focusing on specific coins instead of broad 'beta' returns. The cryptocurrency trading company notes that both retail and institutional sides have rarely seen simultaneous entries into BTC and ETH. This also indicates that market participants are prioritizing quality with the weakening momentum in Nasdaq.
The sharp intraday drop of $4,000 in Bitcoin last Friday revealed how fragile the current recovery is. It was triggered by a chain of consecutive liquidations exceeding $2 billion within just one hour. However, the market absorbed this sudden shock without additional selling. This situation indicates that the market is moving towards an attractive price stagnation without fully entering a panic mode.
Central Bank Decisions Will Determine the Next Move
Expectations in the cryptocurrency market have given way to cautious monitoring. All eyes are now on the upcoming central bank decisions. The Federal Reserve's interest rate decision, which will be announced on Wednesday, and the Bank of Japan's meeting scheduled for next week will shape the interest rate differentials and volatility between asset classes until the end of the year.
Wintermute emphasized that option pricing expecting high price volatility for the year-end has raised divergence in the market. Traders have adjusted their course to either $85,000 or $100,000 by the end of the range. However, unless there is a significant macro surprise, it seems likely that cryptocurrencies will continue to trend sideways.
The rise of delta-neutral and yield-focused strategies in the market outside of major coins shows that investors are prioritizing capital efficiency. Funding opportunities in low market cap assets are attracting attention; however, appetite for directional altcoin risk remains low.
Wintermute stated in its report: 'The market is in a price stagnation far from stability; developments that will determine the direction from here will be macroeconomic events.' Currently, traders prefer to secure returns rather than focus on breakouts (large price jumps), it was stated.
This table indicates that an altcoin season is unlikely in the near term. While capital remains in BTC and ETH, traders are avoiding large directional positions in altcoins. They are leaning more towards delta-neutral strategies, but the conditions for a new altcoin rally have not yet materialized. For a strong alt season, macro uncertainty must first dissipate, Bitcoin must break through significant resistance levels and remain there, and the market's risk appetite must return. For now, these conditions do not seem to be on the horizon.
