'Traders positioning themselves for massive altcoin rally'

• Coinbase analysts and crypto VC predict altcoin rally after inception
• Analysts cited the weakening of BTC's dominance and capital inflows to altcoins

Analysts believe the crypto market could be positioning itself for a massive altcoin rally following Donald Trump's inauguration on Monday. In fact, Coinbase analysts noted that the drop was small Bitcoin (BTC) dominance earlier this week fueled the latest altcoin pump.

Additionally, the analysts said traders are positioning themselves for renewed altcoin momentum under the new administration. Part of their weekly market report read,

“Meanwhile, the fall in BTC's dominance from 58.5% to the 57.3% support level at the January 15th inflationary relief rally suggests to us that traders may be in position for a market rally less altcoin behind advanced promoters for risk assets. and crypto.”

Bitcoin's dominance is declining

Chris Burniske, partner at crypto VC firm Placeholder and former crypto director ARK Invest, echoed a similar sentiment, citing BTC's dominance. he is said,

“Importantly for the long tail, $BTC's dominance has been slowly eroding since the end of November 24 – fireworks if that continues.”

Source: X

According to Coinbase analysts David Duong and David Han, stablecoin inflows are another sign of a possible altcoin pump.

They noted strong capital inflows into the space and much of it went to altcoins as BTC and ETH recorded outflows.

“Stablecoin supply – perhaps the clearest proxy for capital flows to these long-tail assets in our view – increased by $1.3B last week, continuing the trends we've seen across the two last month. This compares to net outflows from the US spot BTC and ETH ETF of $457M and $206M respectively.”

Despite the bullish outlook, however, another indicator – ETH / BTC – did not align with the rest, at least at the time of writing. Here, this ratio tracks the relative performance of ETH against BTC, with the same rallying during the strong altcoin season in November.

Source: ETH/BTC, TradingView

In fact, the ratio also hit a new low of 0.31 at press time. As part of the barometer of the altcoin sector, this is not going well for the expected altcoin rallyespecially if the November trend repeats itself.

That being said, altcoins like Fartcoin and XRP were the weekly winners, with gains of nearly 100% and 30%, respectively. Solana (SOL) also registered 30% gains, while Hedera posted 22% gains.

Here, it is worth noting that Hedera and XRP were among the main players in November's altcoin run as well. Whether they can keep the momentum going this time around remains to be seen.