Bitcoin’s recent ascent to record highs has reignited enthusiasm among bullish investors, but there’s more to the story than meets the eye. Alongside the soaring price of the leading cryptocurrency, significant global economic shifts are setting the stage for potential market movements. With Japan’s new Prime Minister, Takaichi Sanae, backing “Abenomics,” the world’s three largest economies— the U.S., China, and Japan—are now tilting toward more easing policies. This alignment creates a favorable environment for asset prices, including cryptocurrencies.
Bitcoin’s Rising Dominance
Bitcoin’s dominance rate has seen an uptick, signaling a renewed focus on the top cryptocurrency. This shift is supported by on-chain data revealing that while mid-sized Bitcoin holders are accumulating, whale distribution has moderated. Glassnode notes that smaller entities remain neutral, suggesting a fresh structural demand is emerging despite continued selling by large holders. This environment serves as a robust counter to fears of an impending bear market, often associated with Bitcoin’s four-year halving cycles.
Historically, bear markets have been triggered by counterparty risks, but the current landscape appears devoid of such threats, at least for now. Investors and analysts alike are left to ponder whether a new counterparty risk might be lurking and ready to disrupt the market.
Altcoins: A Mixed Bag
While Bitcoin grabs headlines, the altcoin market presents a varied picture. Ether treasuries now hold more circulating supply of the token compared to Bitcoin treasuries, indicating a maturing market with deliberate capital rotation. According to Timothy Misir, head of research at BRN, this shift underscores the evolving dynamics within the crypto ecosystem.
Digital asset products recorded a staggering $5.95 billion of inflows last week, marking the largest weekly inflow on record, per CoinShares data. This influx highlights the growing interest and confidence in digital assets despite the volatile nature of individual tokens. For instance, Tron’s TRX aims to breach its 50-day moving average, buoyed by activity on the new SunPerp platform. Conversely, Lido’s LDO token, after a 7% surge last week, lost steam over the weekend, slipping 3%.
Challenges on the Horizon
Despite the optimism, challenges remain. Tokenomics has issued a caution about upcoming major unlocks exceeding $5 million for tokens like APT and LINEA, which traders should monitor closely. Such events can lead to increased volatility and potential sell-offs, impacting the broader crypto market.
In traditional financial markets, the Japanese yen weakened against the U.S. dollar, even as Japan’s Nikkei index reached record highs. Meanwhile, despite a U.S. government shutdown, S&P 500 futures edged up slightly. This complex interplay of economic factors could ripple through to the crypto markets, influencing investor sentiment and market dynamics.
Derivatives and Market Movements
Bitcoin’s record rise over the weekend was mirrored by an increase in open interest in perpetuals on major exchanges, with funding rates climbing to levels not seen since mid-August. However, Ether’s open interest has remained flat, continuing its downtrend from late August.
On the derivatives front, except for BNB, MNT, CRO, and TRX, other top 30 tokens have experienced a negative cumulative volume delta in the past 24 hours, indicating net selling pressure. Despite Bitcoin’s bullish spot price action, CME’s BTC October futures have yet to reach their August 15 peak.
Deribit pricing for BTC options suggests a potential 3% price swing in the week ahead. While short-term options show a bias for calls, options expiring beyond October 17 maintain a moderate put bias. Ether risk reversals reflect a similar sentiment, highlighting cautious optimism amid Bitcoin’s high price levels.
Looking Ahead
As Bitcoin continues to capture attention with its record highs, investors are urged to stay vigilant. The alignment of easing economic policies among the world’s largest economies provides a supportive backdrop for asset prices, yet the crypto market’s inherent volatility demands caution.
For those watching the space, the interplay between Bitcoin’s dominance and altcoin performance remains a key area of interest. As the market matures, the dynamics between various tokens and their respective ecosystems will continue to evolve, offering both opportunities and challenges for crypto enthusiasts and investors alike.
As always, staying informed and adaptable to market changes is crucial for navigating the ever-shifting landscape of cryptocurrency investments.
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
