Bitcoin Decouples from Ethereum: Here’s What It Means for Altcoin Season

The growing Bitcoin dominance and recent decoupling from Ethereum have sparked concerns over the viability of the altcoin season.

Amid a broader sideways trend in the crypto market, Bitcoin has shown resilience. Although it has demonstrated strength, the pioneering cryptocurrency has battled to hold the psychological $100,000 price mark amid hawkish macroeconomic developments.

Meanwhile, an interesting trend has developed with each time Bitcoin rebounded to $100,000. On-chain analytical firm Lookonchain identified this pattern in a recent post, raising concerns among the crypto community.

Bitcoin Shows Strength Against Ethereum

Yesterday’s post showed a strong decoupling between Bitcoin and Ethereum, the altcoin leader. Lookonchain pointed out that each time Bitcoin reclaimed $100,000, Ethereum trended lower than the subsequent event.

For context, when Bitcoin reached $100,000 for the first time on December 5, Ethereum’s price was $3,900. After a retest, the premier asset surged past the notable price mark again on December 11, but Ethereum traded a bit lower at $3,800.

Meanwhile, Ethereum has sustained that steady price decline as Bitcoin reclaimed $100,000, trading at $3,700, $3,400, $3,200, and $2,800 in the last four scenarios. The pattern signaled a strong decoupling between the two crypto giants.

Furthermore, the ETHBTC chart confirms this growing outmuscling. Ethereum has fallen to 0.0281 BTC, a four-year low against Bitcoin, amid escalating price weakness.

Notably, this trend has surfaced on other major altcoins, including Dogecoin, BNB, and Cardano.

Why is This So?

Bitcoin’s growing outperformance could stem from its increasing market dominance. Data from TradingView shows that Bitcoin’s share of the crypto market has recently surged substantially, especially in the past few days.

For perspective, Bitcoin’s dominance surged to a four-year high of 64.34% on Monday, extending its growth in the past two months. Although it has retraced slightly to 60.19% today, the increasing stat points to why Bitcoin has outdone altcoins.

Moreover, Bitcoin’s extensive lead follows growing capital inflows into the pioneering asset. A significant source of this flow comes from the US spot exchange-traded funds (ETFs), which have recorded a cumulative positive flow of $1.1 billion in the past five days.

Altcoin Season In Jeopardy?

Meanwhile, Bitcoin’s decoupling against altcoins has fueled speculations that there will be no altseason. Sam Wouters, a River Financial executive, echoed this sentiment in a recent analysis.

He reinstated his earlier assertion that there will be no altcoin season—a market phase marked by altcoin’s massive overperformance against Bitcoin—this bull cycle. The marketing director cited Bitcoin’s market cap decoupling against other cryptocurrencies as the basis for this analysis.

Another notable analyst, Murad, shared a similar view. He noted in a recent commentary that the industry has evolved permanently, with Bitcoin now the center of attraction.

Furthermore, the analyst stated that the increasing number of new altcoins deployed into the crypto market has also contributed to the new reality.