Bitcoin's market dominance has been increasing since 2023, currently sitting at around 61.6%, a decline from its peak of 64.3% on February 3. This trend indicates a shift in the cryptocurrency market dynamics, as altcoins have faced setbacks due to macroeconomic uncertainties impacting risk-on assets harder than Bitcoin. The introduction of Bitcoin exchange-traded funds (ETFs) has further concentrated liquidity away from traditional altcoin markets. Past cycles often saw investors transitioning from safer assets like Bitcoin to riskier altcoins. However, analysts now suggest that the overwhelming number of newly launched cryptocurrency tokens, which exceed 12.7 million as of March 15, and many of which have low liquidity, may lead to a permanent capital trap. The proliferation of these low-cap tokens complicates the market landscape, making altcoin seasons less likely in the future.

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