Bitcoin’s Market Dominance Continues to Outshine Altcoins Ahead of U.S. Election – Is an Altcoin Rally on the Horizon?

As Bitcoin (BTC) maintains a stronghold on the crypto market, altcoins remain in a challenging position, with little indication of an immediate comeback. According to K33 Research, regulatory uncertainties have left altcoins particularly vulnerable as the U.S. election approaches.

BTC’s dominance surged to a new high of 60.6%, its strongest level since April 2021, leaving major altcoins such as Ethereum (ETH) and Solana (SOL) trailing. While Bitcoin recently slipped by less than 4% from its near-record high of over $73,000, large-cap altcoins like ETH and SOL dropped nearly 10% from their recent peaks, causing the CoinDesk 20 Index to decline by 6%.

Bitcoin’s Hold on the Market Strengthens

With Bitcoin absorbing the majority of crypto investments, altcoins have struggled to keep up. Analysts at Bitfinex noted that altcoins are seeing sharper pullbacks than BTC whenever the leading cryptocurrency experiences a downturn. They suggested that without a strong catalyst, altcoins may continue to underperform in the near term.

Bitfinex also reported that speculative interest supporting altcoin surges in the past has largely faded, as perpetual futures funding rates return to normal levels. “We expect further declines for altcoins relative to Bitcoin in the mid-term,” the report indicated, citing a lack of interest from speculative investors.

Regulatory Uncertainty Casts a Shadow on Altcoins

Altcoins have been impacted by ongoing regulatory ambiguity, particularly in the U.S., as K33 Research emphasized in a recent analysis. Analysts Vetle Lunde and David Zimmerman noted that Bitcoin is less affected by regulatory concerns, positioning it well for medium-term growth regardless of the election outcome. In contrast, altcoins could be more sensitive to regulatory changes resulting from the election, potentially facing a rougher path ahead.

A Macroeconomic Tailwind for Crypto in 2025?

Despite the challenges, a favorable macroeconomic backdrop into 2025 could provide a boost for the entire digital asset space, including altcoins. David Duong, head of research at Coinbase, shared his optimism, stating that the U.S. election could serve as a potential catalyst for altcoins to reclaim some ground. According to Duong, Bitcoin’s market dominance may stabilize, with altcoins likely taking “more of a front seat” as investors look to diversify in light of the election.

Duong highlighted that, regardless of the election's outcome, macro conditions could support a more favorable environment for crypto growth. "I'm cautiously optimistic through early to mid-2025,” he said, noting that positive economic conditions could drive both Bitcoin and altcoin performance across the broader market.

As the U.S. election draws closer, the crypto landscape remains focused on Bitcoin's rising dominance, while the potential for an altcoin rally hinges on regulatory clarity and broader economic tailwinds.