Bitcoin Near-Term Fragility Sparks Investor Shift to Altcoins

Bitcoin near-term fragility is starting to show as the leading cryptocurrency enters a more cautious phase. After hitting a new all-time high recently, Bitcoin’s momentum has cooled. Analysts now say that the market is moving into a more delicate and reactive period.

According to a report from Bitfinex, some long-term holders are beginning to sell their BTC, locking in profits. This change in behavior, combined with growing interest in altcoins, suggests that capital is rotating within the crypto market.

Why Bitcoin Is Showing Signs of Near-Term Fragility

For the first time since early 2024, long-term Bitcoin holders are starting to move their assets to exchanges. This usually means they plan to sell. Many are shifting their coins into new wallets or trading platforms to cash in on recent gains.

Key points from Bitfinex’s weekly Alpha report include:

• Spot ETFs and corporate treasuries are absorbing much of the sold BTC.
• This type of rotation is typical during bull markets.
• However, the next trend will depend on how strong current buying pressure remains.

Bitfinex warns that if demand weakens, Bitcoin near-term fragility could become more serious. A large number of holders are currently in profit, which raises the chance of increased selling. On-chain data shows BTC’s price is now above the 95th percentile range, meaning many investors are sitting on big gains. These profits often lead to sell-offs from short-term traders.

As a result, the supply may shift to new buyers at higher prices, which can raise the overall cost base. Bitfinex explains that this setup could spark a short rally, but also make the market more unstable. If momentum drops, prices may fall sharply, increasing the risk of volatility.

Altcoins Rally as Bitcoin Cools Off

While Bitcoin slows down, altcoins are making big moves. Analysts say we are now seeing an “aggressive catch-up rally.” Investors are rotating their funds into other major cryptocurrencies to seek better returns.

Bitcoin and Altcoin Market Update: Insights into current price trends, investor behavior, and potential risks shaping the crypto landscape.

Highlights of this shift include:

• Ethereum (ETH) and Solana (SOL) are outperforming Bitcoin.
• The “Others Index” — which tracks altcoins outside the top 10 — has jumped over 35% in two weeks.
• This growth has added around $85 billion to the market.

At the same time, Bitcoin’s market dominance is falling. It has dropped by 6.9%, with seven straight days of decline. This is the first time such a trend has appeared since December 2023.

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