Expect Massive Altcoin Season When Bitcoin Dominance Reaches 65%
HashKey's Jupiter Zheng and David from Blockworks agree on the potential for the next altcoin season. A report by HashKey indicates bullish sentiment towards altcoins, particularly if Bitcoin's market dominance peaks above 60% or 65%. Currently, BTC dominance is at 61.64%.
Zheng identifies three key areas of interest: Ethereum, Solana, and certain DeFi tokens like UNI and SKY.
Regarding Ethereum, Zheng cites increased competition, value diversion, and lower transaction fees as factors affecting its performance. The Ethereum community is working on metrics to gauge 'Ethereum alignment,' which may enhance the ecosystem's resilience.
For Solana, Zheng describes it as a “major fundamental play,” noting its efficiency and operational capabilities compared to Ethereum. He suggests that Solana may be next in line for ETF selection after ETH and BTC.
Many DeFi projects have transitioned into foundational infrastructure, creating a necessary landscape across cycles. However, Zheng expresses caution regarding Layer-2 solutions, indicating that only a few will maintain value. He recommends focusing on the top-performing Layer-2s, similar to selecting the best stocks in the Magnificent Seven.