The first quarter of 2025 has been primarily characterized by discussions surrounding the altcoin season, which tends to happen as the bull cycle draws to a close. Historically, capital generally shifts from Bitcoin to alternative cryptocurrencies, as investors aim for maximum returns before the anticipated bear market sets in.
However, this year’s cryptocurrency landscape has presented a different narrative, with a majority of large-cap assets not experiencing the typical capital flows observed in previous cycles. Recent on-chain data indicates that Bitcoin has maintained its dominance in the crypto market, outperforming all categories of altcoins.
Is It the Right Time to Invest in Altcoins?
In a post dated April 5 on the X platform, the pseudonymous analyst Darkfost provided thought-provoking on-chain insights into the performance of various categories of altcoins compared to Bitcoin, the largest cryptocurrency. According to this analyst, altcoins are falling behind Bitcoin with respect to market capitalization growth.
In their analysis, Darkfost evaluated the market cap growth of Bitcoin, large-cap altcoins (the top 20 largest altcoins), and mid-to-small-cap altcoins by assessing the differences between their 365-day and 30-day moving averages (MAs). The analyst stated that the divergence between the two moving averages acts as a growth momentum indicator.
Generally, when the short-term moving average (30-day MA) increases more rapidly than the long-term moving average (365-day MA), it suggests significant market cap growth. Conversely, a lagging 30-day moving average indicates a slowdown in growth momentum.
Source: @Darkfost_Coc on X
As illustrated in the above chart, Bitcoin is leading in market cap growth compared to both large-cap and mid-to-small-cap altcoins. Darkfost pointed out that this growth ratio disparity has reached a peak not seen since October 2023, an era linked with a brief altcoin rally followed by BTC’s surge in dominance.
The analyst further emphasized that if this growth ratio turns negative, it often indicates that a significant correction has taken place. Historically, a negative ratio may signify a favorable buying opportunity for investors looking to enter the market.
Quick Overview of Bitcoin and Ethereum Prices
As of now, Bitcoin (BTC) is trading at approximately $83,500, showing no major fluctuations in the last 24 hours. In comparison, Ethereum (ETH) is priced around $1,805, with a similar lack of change in the past day.
While Bitcoin experienced a decline of about 15% in the first quarter of 2025, Ethereum suffered an almost twofold loss during the same timeframe. This performance gap underscores the challenges faced by the “king of altcoins” in recent months.
The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from iStock, chart from TradingView
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