BTC dominance continues to decline, altcoins are regaining their position: Is the market landscape changing?

The flow of capital moving out of Bitcoin (BTC) into smaller-cap tokens is not just a short-term craze. In fact, investors are actively shifting focus toward alternative assets with a longer-term commitment mindset. From 2025 to early 2026, this transition marks an important phase in the transaction volume structure within the crypto market.

Changes in Volume Balance

BTC dominance — the index measuring Bitcoin's transaction volume share — has decreased significantly. From 45–50% in early 2025, this index has now fallen to around 30–35%. The latest data shows Bitcoin currently accounts for 56.43% of the market share, reflecting a correction in the long-term trend.

Conversely, altcoins are experiencing impressive performance with transaction volumes exceeding 55%, even approaching 60–65% at certain times. This period is considered one of the strongest dominance phases of this coin class on the chart.

Ethereum (ETH) has seen more modest volume growth, around 20–30%. Despite ecosystem expansion and scaling solutions being implemented, ETH has not fully absorbed the speculative capital flowing into smaller altcoins. With the current price at $3.31K and 24-hour volume at $499.88M, ETH is seeking new momentum to accelerate.

What's Driving This?

An interesting phenomenon: although BTC prices surged in early 2025, trading volume did not keep pace. This divergence indicates traders are rotating profits rather than accumulating more BTC. Increased risk appetite, higher leverage use, and market trend-based trades have become the main drivers behind altcoin rallies.

However, this trend requires abundant liquidity and positive sentiment to sustain. Any shocks from macro factors or sharp Bitcoin volatility could quickly reverse the situation. Investors should closely monitor the relative volume shifts, the divergence between BTC price and volume, as well as ETH's increasingly important role in the flow balance.

On-chain Activity Tells a Different Story

Chain data reveals differences between wallet growth rates and actual usage — and this gap directly impacts trading volume.

Ethereum shows steady growth in addresses, from 300 million to 370 million currently (454.6 million according to the latest data). But the weakness lies in daily active addresses, which increase much more slowly. As a result, most wallets remain “dormant,” limiting short-term trading volume.

BNB Chain tells a completely different story. Total addresses have surpassed 730 million (latest data: 273.5 million), and more importantly, daily active users lead the market at 4.4 million. Frequent transactions keep volume high while maintaining low fees — a factor that is still reinforced in the current cycle.

Tron (TRON), Near (NEAR), and Solana (SOL) maintain stable activity, neither spiking nor dropping sharply, helping keep trading volume steady. Near records a 24-hour volume of 4.72M, while Solana is stronger at 87.03M.

Conclusion: sustainable activity is the foundation of sustainable volume. Regular trading creates deeper liquidity and faster capital turnover — signs of genuine usage commitment, not just speculation. FOMO may create wallets, but only actual usage generates volume.

Technical Picture: The Spring Is Being “Tightened”

Bitcoin dominance is “locked” within a clear descending wedge pattern on the chart. The bears continuously lower the highs, but the bulls remain resilient in defending the support line — creating a tense standoff.

As the trading range narrows, market reactions are likely to explode, especially as price energy has been compressed for a long time. History shows BTC dominance often experiences decisive breakouts when escaping from compression structures.

A convincing breakout above resistance will quickly reverse sentiment, triggering a strong rotation of capital. At that point, capital on the sidelines could flood into high-beta assets, pushing the market share of coins outside the top 10 on a parabolic trajectory — heading toward 16.24% from the current 7.09%.

Until then, the compression remains the dominant factor. But every small rebound “stretches” the market spring further. A breakout could be imminent — when it happens, the movement will not be gentle.

Final Thoughts

Capital is restructuring not because of a fad, but due to strategic shifts. Bitcoin dominance weakens, altcoins rise, and on-chain activity shows that genuine investors are committed to different networks. Those who closely monitor these signals will have an advantage in the next phase of the transition.