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- Bitcoin’s market dominance drops significantly after a strong pump in the altcoin space following the Ripple XRP ruling on Thursday.
- Industry players are carefully observing whether this is the beginning of the new altcoin season or FOMO at play.
On Thursday, July 13, the Southern District Court of New York announced that the programmatic sales of Ripple’s XRP don’t constitute the offering of investment contracts. Soon after the XRP price shot up 60% hitting its 2023 high and adding over $21 billion to its valuation in a single day.
Along with XRP, the entire altcoin market sprung into action with Polygon (MATIC), Cardano (ADA), Solana (SOL), and Stellar (XLM) all rallying by 25-50% in a single day. The recent rally in the altcoin space has pushed down the Bitcoin market dominance by 1.5% in a single day.
XRP declared not a security.
Bitcoin dominance: pic.twitter.com/veZDJTHQlu
— Will (@WClementeIII) July 13, 2023
From grabbing a 50% share two days ago, Bitcoin’s dominance in the overall crypto market has now dropped by 1.5% and is currently at 48.5%. A few weeks ago, the market dominance of BTC crossed the 50% mark after a period of two years with limited growth. This happened as several major financial firms applied for spot Bitcoin exchange-traded funds. In the past 24 days, the dominance of Bitcoin has remained around 51% and 52%.
The growing scrutiny of the crypto market by the U.S. Securities and Exchange Commission (SEC) this year has put some selling pressure on altcoins. Also, the SEC has said that a majority of the cryptocurrencies constitute unregistered securities, which makes it harder to trade altcoins. However, Bitcoin hasn’t faced similar scrutiny as most American regulators see it as a commodity.
Altcoins Season Started?
After the ruling on Ripple’s XRP, the crypto community is hopeful that other altcoins won’t as well classify as securities. With a strong rally in the altcoin space on Thursday, crypto market proponents have started stating that this could be the beginning of the new altcoin season.
However, the question is whether this altcoin pump will sustain or if there’s some sort of FOMO at play in the market. Speaking to Bloomberg, Michael Safai, partner at quantitative trading firm Dexterity Capital said:
“A lot of buyers recognize that these altcoins have missed out on the rally, and that there’s some immediate upside to be had. There’s also a bit of FOMO in play; if the regulatory outlook brightens further, the conditions for a prolonged rally start to emerge.”
But after the strong single-day gains on Thursday, altcoins have been showing signs of retracement on Friday. As of press time, XRP is trading 7.51% down at a price of $0.729. XRP has dropped under Binance Coin (BNB) coming back to the fifth spot in the top ten crypto list.
It is uncertain whether this altcoin rally can be sustained. The longer-term perspective indicates that crypto markets are currently experiencing a period of limited price movement within a certain range.
