Bitcoin’s 30% sprint starves altcoins – HODL BTC or rotate capital?
The altcoin market growth has slowed down after an explosive start to May, and buying power has continued to fall.
- The rising BTC.D and flat altcoin market cap trends showed that Bitcoin is now leading the crypto market.
- The falling Tether reserves have been ongoing throughout 2025 and have helped explain the overall lack of altcoin growth.
The Bitcoin [BTC] trend has been primarily bullish since the 20th of April, when the $86.3k level was flipped from resistance to support.
Bitcoin raced higher by 30% in 30 days from that level to set a new all-time high at $111,880.
Naturally, the recent move was not without pause. It saw a 5.4% setback over the past week, losing 1.2% in the past 24 hours.
Meanwhile, the altcoin market has stagnated for almost three weeks now. This suggested capital flow was directed primarily into Bitcoin.
While the long-term performance of Bitcoin was encouraging, altcoins were unable to outperform the king of crypto. This situation might not change in the coming weeks.
Bitcoin dictates market trends, and buying power was drying up
The Bitcoin Dominance (BTC.D) chart tracks BTC’s share of the total crypto market cap. A rising trend indicates that Bitcoin’s capitalization was growing faster than the altcoin market.
This uptrend has been the case since 2023.
A brief dip in November 2024 failed to break the structure. Even the recent sharp decline didn’t invalidate the broader trend.
Altcoin investors should not get their hopes of recovery up yet. The best thing they can do is hold on, especially if underwater.
Because the altcoin market cap has lacked a strong trend in May, meandering about the $1.2 trillion mark instead.
Combined with the rising BTC Dominance, it signaled that altcoins were not seeing outstanding capital inflows.
Stablecoin data reveals deeper trends
In 2024, the Tether reserves on all exchanges shot higher.
The metric reached its current peak in February, at $43.696 billion. Rising Stablecoin Reserves on exchanges indicated increased buying power in the market.
This pattern generally accompanies explosive Bitcoin and altcoin rallies. As the leading stablecoin by size, Tether provided a good look into the sentiment of market participants.
Despite the peak in February, the falling Tether reserves in 2025 indicated dwindling buying power. This helped explain the slowdown in the altcoin market cap growth.
The Bitcoin rally could be explained by institutional interest, such as through ETFs.
