Altcoin Season Is Coming, Ethereum (ETH) Leads the Rally

Altcoin Season Is Coming, Ethereum (ETH) Leads the Rally

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Bitcoin cannot hit the $62K resistance level, altcoins and the leading altcoin, in particular, becoming market makers.

Ethereum has updated its all-time high at $4,455.74, according to Coinmarketcap. The previous record was set in May. Analysts are trying to explain the situation by deferred demand, market maturity, and some technical actions. Indeed, the market situation looks strange. Bitcoin rose not so high despite the SEC approving two bitcoin futures ETFs. The threat of hyperinflation in the United States has not disappeared. Nevertheless, investors are in no hurry to invest in BTC, funds are starting to invest in ETH, SHIB, BNB, and other altcoins.

The deferred demand for altcoins could indeed have arisen due to the hype around ETFs. Although trading on the first Bitcoin Futures ETFs started off well, ETFs overall did not have much of an impact on the market. After the correction, Bitcoin ran into a strong resistance level of $62K and is not yet ready to overcome it. However, Bitcoin Dominance is still holding above 44%.

Some experts point out that the flow of investment in altcoins means market maturity and growing player expertise. Investors and traders now better understand the nature of cryptocurrencies and are ready to invest not only in the oldest cryptocurrency but also in young currencies. The best example is the skyrocket of the Shiba Inu (SHIB) meme coin, which has grown by a million percent since the beginning of the year.

In early January, the SHIB price was $0.000000000072. Two days ago, the all-time high was set at $0.00008845, an increase of 1.2 million times. The capitalization of SHIB outperformed the capitalization of Dogecoin (DOGE), now the coin is ranked ninth in the Coinmarketcap rating. Perhaps it was Shiba Inu that pushed ETH to rise.

SHIB runs on the Ethereum blockchain and uses a deflationary model of token burning. According to the tracker, Shiba Inu has become the third platform in terms of the amount of ETH burned, besides Ethereum itself. The burning of part of the fees in the Ethereum network was launched on August 5 with the London upgrade. Since then, 668,339 ETH have already been burned, and the price of ETH has increased by almost 60%, from $2,730.

Ethereum’s deflationary model obviously works. This inspires confidence among institutional investors. They are willing to invest in both Ethereum itself and other cryptocurrencies associated with the Ethereum blockchain.

Back in early 2021, most experts predicted the decline of bitcoin and the rise of the “altcoin season”, that is, an increase in the influence of altcoins on the market. And only now it is obvious that the forecast is starting to justify. The share of bitcoin has been decreasing throughout the year. The year began with Bitcoin Dominance above 71%, now it dropped to 44%, and in mid-May, it was even below 40%. The share of Ethereum, on the contrary, is growing all the time, from 10% at the beginning of the year to almost 20%.