Pressure from profit-taking emerges in Bitcoin market, signaled by on-chain data: Glassnode
In the dynamic world of cryptocurrency, Bitcoin continues to dominate the market landscape. The digital asset's share of total crypto market capitalization, known as its dominance, has reached an impressive 60.3% in 2025, marking a third consecutive year of growth. This growth defies earlier predictions of an altcoin resurgence.
One of the primary drivers behind Bitcoin's sustained dominance is the massive influx of institutional investments. Regulated vehicles, such as Bitcoin spot ETFs approved in the U.S. beginning in 2024, have played a significant role in enabling these investments. These ETFs offer secure, regulatory-compliant access for large institutional capital, strengthening Bitcoin's price stability compared to altcoins.
Regulatory progress has also bolstered institutional confidence in Bitcoin. Some states now recognise Bitcoin as a strategic asset, and political initiatives support its wider adoption, further solidifying its status as a "digital gold" or store of value.
However, while institutional demand for Bitcoin remains strong, a notable shift is emerging. Ethereum, thanks to its staking yields and network upgrades, attracted $9.4 billion in spot ETF inflows in Q2 2025, surpassing Bitcoin in that quarter. This diversification suggests that some institutional capital is reallocating towards yield-generating altcoins, indicating a gradual shift that could eventually reduce Bitcoin's dominance.
Currently, Bitcoin's dominance stands near 59–60%, a level analysts refer to as a "decision zone." Historically, high Bitcoin dominance corresponds to capital consolidation into Bitcoin as a safer asset, delaying altcoin rallies. When Bitcoin dominance falls below key thresholds (around 55%), it typically signals liquidity rotating into altcoins, triggering "altseason." Thus, the strong institutional embrace of Bitcoin is currently postponing this shift, though signs of reallocation and potential altcoin rotations are emerging.
Meanwhile, the market has shifted from seller exhaustion to a strong rebound near recent highs, according to Glassnode. The ETF MVRV rose to 2.43, indicating that funds are holding significant unrealized gains. A close above $122,500 could pave the way for new highs, while a break below the $116,000-$117,000 range might see Bitcoin return towards the $112,000 mark.
Trading volumes dropped 27.7% to $13.7 billion, and the daily chart shows Bitcoin retreating from the upper Bollinger Band after testing $122,000 resistance. Elevated profitability, with 94.1% of the supply in profit, suggests profit-taking could quickly reverse sentiment. Bitcoin's options open interest increased by 6.7% to $42.4 billion, and exchange-traded fund flows improved, with outflows shrinking by more than half.
In summary, institutional demand, supported by regulatory frameworks and investment products, has reinforced Bitcoin's dominant market position in 2025. This institutional preference acts as a stabilizing, delaying factor for broad altcoin rallies (altseason), which seem poised to begin if and when capital starts shifting away from Bitcoin towards higher-risk altcoin allocations.
[1] Regulatory frameworks and investment products bolster institutional demand for Bitcoin. [2] Institutional capital is gradually reallocating towards yield-generating altcoins. [3] High Bitcoin dominance delays altcoin rallies, but signs of reallocation are emerging. [4] A shift in capital away from Bitcoin could trigger "altseason."
The regulatory frameworks and investment products available have strengthened institutional demand for Bitcoin.Investors are gradually shifting their focus towards yield-generating altcoins.High Bitcoin dominance has thus far delayed altcoin rallies, yet signs of capital reallocation are becoming visible.A significant shift in capital away from Bitcoin could potentially instigate "altseason."
