Volatility calls grow as BTC dominance dips and Bitcoin, altcoin correlation weakens

Bitcoin’s (BTC) dominance has fallen to its lowest level in over a year, recording its steepest weekly drop in three years. The metric that tracks the percentage of the total crypto market cap held by BTC has fallen by 5.8% in just one week, now resting at 59.25%, the biggest drop since June 2022. 

According to TradingView, the dominance rate peaked at nearly 66% by the end of June but has since retreated from 63% to below 60% in the last seven days. The decline coincides with a rise in the total market cap of altcoins, which has now reached $1.5 trillion, the highest level since late January 2025.

Bitcoin’s price has dipped by 3.7% from its all-time high of $122,838, reached on July 14. As of the time of this publication, BTC was trading around $118,079, per Coingecko data.

Altcoin market performance teases season start

Capital inflows into altcoins have been on the uptrend since mid-July, which could mean that investors now favor smaller-cap assets over Bitcoin, possibly because the highest ranking coin by market cap reached an all-time high just seven days ago.

Ethereum’s (ETH) 25% charge into the green zone has pulled up several altcoins into gains and helped some of them reach multi-month highs. Some analysts believe that if this momentum continues, the altcoin season could begin as early as August.

Altcoin season is confirmed when 75% of the top 50 cryptocurrencies, excluding stablecoins and asset-backed tokens, outperform Bitcoin over a 90-day period. Only 50% of alts have recorded better gains than BTC in the last 3 months, but more coins could be beating the crypto “gold standard” in the coming weeks.

In an X post on Sunday, Podcaster Michael van de Poppe asserted that the altcoin bull market has already begun. “The Bitcoin dominance has a strong bearish divergence confirmed, as it broke south of 65%. The second half of the year is the best period of the year for altcoins, which means that this is the time to maximize your returns,” he noted.

Pudgy Penguins (PENGU) was among today’s biggest altcoin gainers with 25% in the last 24 hours. The TRUMP token, a memecoin associated with President Donald Trump, also gained 11.4% over the same period. Most tokens in the top ten bar stablecoins are charting daily gains between 1.5% and 10%. 

Correlation between BTC and altcoins is weak

Data from the Correlation Heatmap, shared by Alphractal in a Telegram group, shows that the average correlation between altcoins and BTC has turned negative in some cases.

“In other words, altcoins are no longer following Bitcoin’s movements,” Alphractal said. “Historically, low correlation is a red flag. It often precedes periods of high volatility and mass liquidations—whether from shorts or longs.”

This divergence could mean that while Bitcoin’s price is cooling off, other coins behave independently to tread on more volatile ground in either direction in the market.

Last weekend was lacklustre for most Bitcoin traders, with the coin trading sideways for most of Saturday and Sunday. However, late Sunday evening in European trading hours, the coin briefly plunged to just above $116,000 after a supposed “liquidity grab.”

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