Altcoins experienced a significant sell-off, resulting in over $460 billion being wiped from the market in just a few days. The decline in altcoin market cap from $1.46 trillion at the end of January to $1 trillion on February 3 marks a 31.5% decline. While the market has shown signs of recovery, it remains 16% below January levels. Bitcoin's dominance in the market, accounting for 61.5% of the total crypto market cap, has prevented capital from flowing into altcoins. The liquidity concentration in BTC is limiting the capital flow into altcoins, hindering the prospect of another altseason. Institutional interest in Bitcoin and the approval of spot BTC ETFs have absorbed liquidity that would have typically rotated into altcoins. Historically, Bitcoin's dominance tends to rise during uncertain times, but this time the presence of institutions makes the rotation to altcoins slower. Additionally, the shift in speculative capital from top 200 altcoins to low-cap tokens lacking liquidity has further affected the altcoin market. Until Bitcoin's dominance weakens and signals capital rotation, altcoin recovery remains in a waiting phase.



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