“BTC Dominance Posts Largest 3-Year Decline, Signaling Weakening Ties With Broader Altcoin Market.”

Bitcoin’s dominance in the crypto market is slipping fast, falling by its sharpest weekly margin in over three years as capital rotates aggressively into altcoins and historical correlations weaken.

According to TradingView data, Bitcoin’s (BTC) dominance — which measures BTC’s share of total crypto market value — dropped 5.8 percentage points in just one week, falling below 61% for the first time since March. The decline marks its steepest weekly slide since June 2022, down from nearly 66% at the end of last month.

During that same three-week stretch, total crypto market capitalization jumped from $3 trillion to roughly $3.8 trillion, led by strong rallies in Ethereum (ETH) and other altcoins as Bitcoin’s price cooled below the $120,000 level.

Correlation Break Points to Incoming Volatility

This shift in dominance is accompanied by a clear breakdown in BTC’s correlation with altcoins — a development that has historically preceded periods of extreme price swings and leveraged liquidations.

“One chart stands out: the Correlation Heatmap,” said analysts at Alphractal. “Average altcoin-BTC correlations are dropping quickly — some even turning negative. That’s typically a warning sign. Low correlation has often come right before sharp market volatility and mass liquidation events, both long and short.”

The decoupling suggests investors are no longer treating BTC as a directional benchmark for the broader crypto market — an unusual dynamic in strong bull phases.

Retail Momentum Driven by Unit Bias

Fueling the altcoin rotation is a psychological pattern known as unit bias — where investors prefer to buy full units of lower-priced tokens rather than fractions of higher-priced assets like BTC.

With Bitcoin nearing record highs, many new and retail investors are turning to cheaper coins such as DOGE, XRP, and other memecoins, often perceiving their low unit price as offering greater upside potential — regardless of fundamentals like market cap or supply.

This behavioral shift, particularly strong during bull runs, continues to divert flows away from BTC and toward speculative altcoins, further reducing Bitcoin’s market share.

Key Market Developments

• BTC Dominance: Down 5.8% in a week, now under 61% — lowest since March 2025.
• Crypto Market Cap: Up from $3T to $3.8T in three weeks, driven by altcoins.
• Correlation Dynamics: BTC-altcoin relationships weakening fast, increasing risk of volatility.
• Retail Trend: Unit bias amplifying flows into lower-priced tokens.

Market Outlook

Bitcoin’s consolidation phase is creating space for altcoins to outperform — but with decoupling trends and behavioral drivers taking hold, market participants should brace for heightened volatility and unpredictable price action.

As institutional flows diversify and retail attention skews toward lower-cost tokens, Bitcoin’s dominance may continue to erode — unless macro catalysts or market corrections shift the dynamic once again.