Bitcoin’s volume dominance has experienced a significant plummet since the beginning of July, as reported by Kaiko Research, a leading cryptocurrency market data provider. The decline in BTC dominance, which measures the share of Bitcoin’s trading volume compared to that of other cryptocurrencies, is believed to have been triggered by the recent Ripple ruling, sending shockwaves throughout the crypto space.
Since the start of July, BTC volume dominance has slipped by 8%, a decline that has caught the attention of market analysts and investors alike. The ruling on Ripple, which came suddenly, has had an immediate impact on altcoin markets, sparking a remarkable rally for various alternative cryptocurrencies. As a result, BTC dominance across the top 25 centralized exchanges is currently sitting at its lowest level since April, settling at just 27%.
The situation is even more pronounced on offshore exchanges, where BTC trading activity has experienced an extreme drop of 20%. This can be attributed in part to the surge in South Korean altcoin volume, where traders and investors have shown an increasing interest in altcoins as opposed to Bitcoin.
Interestingly, despite regulatory crackdowns on cryptocurrencies, U.S. exchanges have also witnessed a surge in altcoin traction over the past month. This indicates that the demand for alternative digital assets remains strong, even in the face of increased scrutiny from authorities.
Kaiko’s market depth data, which measures liquidity based on 1% market depth, has shown a slight increase in altcoin liquidity since the start of July. This metric aggregates bids and asks across all order books for an asset across all centralized exchanges, providing a comprehensive measure of its liquidity.
Notably, the top 10 altcoins by market cap have seen an increase of approximately $20 million in 1% market depth since July. It’s important to note that these measurements include price effects due to the recent rally. However, even after eliminating USD price increases for these assets, the liquidity levels remain relatively stable, indicating that the demand for altcoins is not purely driven by speculative price movements.
The recent developments suggest that the cryptocurrency market is undergoing a potential shift in favor of altcoins. With a plethora of new tokens launching and various project updates coming to fruition, the stage may be set for a significant turnaround for alternative digital assets. Investors and traders are keeping a close eye on the evolving market dynamics and adjusting their strategies accordingly.
Nonetheless, it’s crucial to approach the cryptocurrency market with caution, as its volatility and regulatory uncertainties still pose significant risks. As altcoins gain traction, investors are advised to conduct thorough research and due diligence before making any investment decisions.
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