Coinbase Observes Increasing Interest in Altcoins as Traders Gear Up for Major Market Shifts

An established cryptocurrency trading platform anticipates a significant surge in the market for alternative cryptocurrencies (altcoins) in the coming weeks following the inauguration of Donald Trump as the new US president on January 20. A recent report by Coinbase advised crypto investors to prepare for potential significant growth in the altcoin market.

Anticipated Surge in Altcoins by Coinbase

Coinbase, a leading cryptocurrency exchange, has hinted at a forthcoming major uptrend in the altcoin sector, set to transpire shortly after Trump’s return to the presidential seat at the White House.

Their latest market commentary underscores the influence of Trump’s inauguration on the cryptocurrency space, affirming that despite the administration’s pro-crypto stance, full implementation of planned crypto policies may take some time.

However, experts at Coinbase project a surge in altcoins once Trump assumes office, indicating a potential substantial rally in the digital asset sphere.

The report predicts that traders are strategically positioning themselves to ignite further growth in altcoins with the new administration in power.

Coinbase’s analysis attributes the recent surge in altcoins to a decline in Bitcoin’s dominance within the market.

“The decrease in BTC dominance from 58.5% to its support level of 57.3% amidst the inflation print relief rally on January 15 implies traders might be gearing up for a substantial altcoin market surge fueled by positive catalysts in the cryptocurrency and risk asset space,” Coinbase articulated in its report.

Declining Bitcoin Dominance

A cryptocurrency expert remarked that Bitcoin’s dominance in the market has slightly waned, creating an opportunity for the recent altcoin rally.

“Significantly for market participants, $BTC dominance has been gradually decreasing since late November ’24 – a noteworthy trend if it continues,” noted Chris Burniske, a partner at VC firm Placeholder and former crypto lead at ARK Invest.

Significantly for market participants, $BTC dominance has been gradually decreasing since late November ’24 – a noteworthy trend if it continues. pic.twitter.com/PyBWTwT8os

— Chris Burniske (@cburniske) January 17, 2025

In their analysis, Coinbase outlined a potential pricing scenario for Bitcoin based on Deribit options contracts.

“The maximum paint point for Deribit BTC options expiring on January 31 and February 28, 2025 stands at $94K and $98K respectively, dropping to $80K for the March 28 expiry. While not a direct forecast of price action, this maximum paint point suggests potential biases in the market positioning by derivatives market makers and sellers hedging their positions,” revealed Coinbase’s analysts in their weekly commentary.

Stablecoin Inflows as a Signal

Market observers noted significant inflows into stablecoins, a pattern interpreted by Coinbase analysts David Duong and David Han as a potential indicator of a bullish altcoin market trend.

Highlighting a substantial portion of these inflows directed towards altcoins, with Bitcoin and Ethereum witnessing capital outflows, the analysts underlined the shift in investment trends.

“The surge in stablecoin supply – seen as a clear marker for capital inflows into these emerging assets – recording a $1.3 billion hike last week, consistent with trends observed over the past two months,” elaborated the Coinbase report.

Coinbase further detailed a net outflow of $457 million for BTC and $206 million for ETH.

Featured image from Pexels, chart from TradingView