In the first week of May, Bitcoin
$94,428 dominance surged to 64.98%, marking its highest level since 2021. This trend highlights the ongoing challenges of an anticipated altcoin season, which remains elusive for market participants. Current market signals appear insufficiently compelling for investors, with short-term capital rotation still favoring Bitcoin.
Shifting Signals in Altcoin Rotation Expectations
Independent analyst Markus Thielen notes that previous trends signaling a shift to altcoins on social media are no longer valid. Ethereum 
$1,803‘s subpar performance, coupled with a lack of strong alternative crypto projects, has delayed the altcoin season. Investors are increasingly considering fundamental metrics in addition to technical indicators when making decisions.
A chart by Matrixport offers no clear signs of capital rotation when comparing Bitcoin dominance and altcoin performance signals side by side. The data reveals that only 24% of altcoins have outperformed Bitcoin in terms of returns over the past 90 days, underscoring Bitcoin’s ongoing liquidity accumulation phase.
Institutional Purchases Play a Decisive Role in the Crypto Market
Thomas Fahrer, Strategy Director at Apollo, suggests that large institutions are gravitating towards Bitcoin with long-term expectations, complicating the transition to altcoins. The potential additional Bitcoin purchase by Michael Saylor’s MicroStrategy could bring the company’s total holdings close to 600,000 BTC. Such moves highlight the impact of institutional buying in the market.
Data from Capriole Investments supports the observation that altcoin performance remains relatively weak while Bitcoin maintains short-term dominance. Institutional purchases continue to reshape the overall dynamics of the cryptocurrency market, with investors focusing not only on dominance rates but also on institutional strategies when evaluating capital rotation.
Investors are left to monitor altcoins as Bitcoin maintains its strong performance. Market commentators suggest that the dominance peak could either revert into a signal for pullback or trigger activity in altcoins, yet a definitive start of a new phase remains unclear for now.