The altcoin market has entered a new phase, but it remains highly selective - this is the assessment of CryptoQuant founder and CEO Ki Young Ju. Rather than relying on the traditional Bitcoin dominance metric, he suggests using trading volume as a more accurate indicator.
According to his analysis, altcoin trading volumes now exceed Bitcoin’s by a factor of 2.7. This shift highlights a growing preference among stablecoin holders for alternative digital assets instead of Bitcoin. The market’s movements suggest a redistribution of liquidity rather than a broad expansion, raising questions about the sustainability of this trend.
Institutional Demand and Market Dynamics
Ki Young Ju also pointed to a structural shift that began in December last year. He previously explained that institutional investors’ demand for Bitcoin ETFs created a divergence in market behavior. These investors are unlikely to swap Bitcoin for other digital assets, and they predominantly operate outside centralized exchanges.
In his latest analysis, he warns that only a handful of altcoins are gaining momentum. With fresh liquidity lacking, the market resembles a PvP battle for a fixed supply of capital. The increasing trading volumes indicate that competition among altcoins is intensifying, potentially leading to unpredictable price swings.
Bitcoin’s Bearish Risks and Market Cleansing
CryptoQuant analysts recently highlighted the risk of Bitcoin transitioning into a bearish phase due to declining risk appetite among investors. They also observed a significant drop in transactional activity, suggesting that the market is undergoing a deleveraging process.
Forecasting future price movements, analysts caution that the current market conditions may continue to favor selective altcoins while broader liquidity remains constrained. The evolving landscape indicates that traders must closely monitor trading volume dynamics to predict emerging trends in the crypto space.
