A popular cryptocurrency exchange platform foresees an outsized market rally for altcoins in the upcoming weeks after Donald Trump assumes the US presidency on January 20. A Coinbase analysis urged crypto traders to start positioning themselves in the altcoin space as a potential huge rally concerning altcoins is on the horizon.
Coinbase Reports Rise Of Altcoins
Coinbase crypto exchange suggested that the upcoming massive market rally for altcoins could be on the way and might happen in the succeeding weeks after Trump returns to the White House.
The crypto exchange released its latest weekly market commentary which provided its insights on Trump’s upcoming inauguration and its impact on the cryptocurrency landscape, saying that although the incoming American president is pro-crypto, it might take a while before “all planned crypto-related policies on the agenda” will be fully implemented.
However, Coinbase analysts noted that after Trump’s inauguration on January 20, they are expecting a surge in altcoins since, they believe, the digital asset space is preparing for a massive altcoin rally.
The crypto exchange’s report stated that crypto traders might be strategically positioning themselves to fuel another growth spurt for altcoins under the Trump administration.
According to Coinbase, the latest surge in altcoins is driven by a slight drop in the dominance of Bitcoin.
“The drop in BTC dominance from 58.5% to its support level of 57.3% during the inflation print relief rally on January 15 suggests to us that traders may be positioning for an outsized altcoin market rally on the back of positive catalysts for risk assets and crypto,” Coinbase explained in the report.
BTC’s Fading Dominance
A crypto analyst observed that the dominance of the world’s most popular cryptocurrency, Bitcoin, could be slightly dipping, a circumstance that allowed the latest altcoin pump.
“Importantly for the long tail, $BTC dominance has been slowly fading since late November ’24 – fireworks if that continues,” VC firm Placeholder partner and former ARK Invest crypto lead Chris Burniske said.
Importantly for the long tail, $BTC dominance has been slowly fading since late November ’24 – fireworks if that continues. pic.twitter.com/PyBWTwT8os
— Chris Burniske (@cburniske) January 17, 2025
In its insight report, Coinbase provided a possible price scenario for Bitcoin through the Deribit options contracts.
“The max paint point for Deribit BTC options expiring on January 31 and February 28, 2025 is $94K and $98K respectively. However, this drops to $80K for the March 28 expiry. While not a pure prediction of future price action, the max paint point suggests possible biases in market positioning by market makers and options sellers who may be hedging their liabilities,” the crypto exchange analysts said in the weekly commentary.
Stablecoin Inflows A Cue
Crypto analysts observed that stablecoins posted strong inflows, which Coinbase analysts David Duong and David Han suggested as an indicator that a bullish market could happen to altcoin.
The analysts added that a big chunk of stablecoins’ strong capital inflows went to altcoins while Bitcoin and Ethereum recorded outflows.
“Stablecoin supply – perhaps the most clear proxy for capital flows to these long tail assets in our view – increased by $1.3B last week, a continuation of trends we’ve observed over the past two months,” the Coinbase report said.
Coinbase also noted that BTC had a net outflow of $457 million while ETH’s net outflow was at $206 million.
Featured image from Pexels, chart from TradingView
