Altcoins have been rallying in recent weeks despite Bitcoin (BTC) holding steady around $10,000. The best measure of the strength of the altcoin market is the Bitcoin (BTC) dominance percentage, which is the Bitcoin (BTC) market cap divided by the total crypto market cap, and this has declined from 71.2% on Sept. 6 to 67.6% currently. In other words, the altcoin market has strengthened 3.6% relative to Bitcoin (BTC) in the past two weeks.
Since Sept. 6, Ethereum (ETH) has risen from $169 to $219, Ripple (XRP) has risen from $0.25 to $0.295, Bitcoin Cash (BCH) has risen from $285 to $320, Litecoin (LTC) has risen from $65 to $76, EOS has risen from $3.17 to $3.92, Stellar (XLM) has risen from $0.06 to $0.075. Cardano (ADA) has risen from $0.044 to $0.052, and Dash (DASH) has risen from $79 to $92.
Simultaneously, since Sept. 6, Bitcoin (BTC) has declined from $10,300 to $9,916.
The past two weeks of altcoin market strengthening follows a sharp rise in the Bitcoin (BTC) dominance percentage from 55% in mid-June to the high near 71% on September 6, equivalently meaning the altcoin market weakened 16% relative to Bitcoin (BTC) during that period of time.
Notably, the beginning of the bearishness in the altcoin market coincided with the announcement in mid-June that Binance would no longer be available in the United States by Sept. 12. It was theorized at the time that this would cause altcoin prices to decline since Binance was one of the only exchanges left which allowed United States residents to trade altcoins anonymously, and therefore United States traders on Binance would be forced to sell off their altcoins and consolidate into Bitcoin (BTC) since there was no solid alternative exchange that they could go to.
The 16% rise in Bitcoin (BTC) dominance percentage between the announcement in mid-June and Sept. 6 suggests that this theory may have panned out.
Now that the banning of United States users from Binance is over, this perhaps gives the altcoin markets a chance to strengthen since the negative pressure of United States users dumping their altcoins on Binance is gone. Also, it is possible that United States users are steadily finding new ways to trade altcoins besides Binance, such as KuCoin, decentralized exchanges (DEX), or even regulated exchanges like Coinbase and cryptocurrency ATMs.
To make a long story short, it seems the loss of Binance in the United States weakened the altcoin market for a few months, as United States traders on Binance dumped their altcoins. Now the altcoin market has a chance to grow since that negative pressure is gone, and perhaps this is the start of a new ‘altseason’.