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Altcoins outperform Bitcoin in August rollercoaster

Altcoins have overtaken Bitcoin in terms of outperformance this month. While the crypto market as a whole has suffered losses, Bitcoin has declined more sharply at a time when the digital asset would have served as a safe haven for investors. Now that altcoins are taking the lead in terms of recovery, it suggests that the downtrend is getting worse over time, especially for Bitcoin.

Bitcoin doesn’t last

Bitcoin has seen its fair share of ups and downs over the past month. Despite being a market mover, the digital asset has failed to hold its value. It posted an overall decline of 13% in August, the highest of any index.

The Large Cap Index is the index that follows Bitcoin’s move to close, so it’s not surprising that it saw the second largest decline over the same period. The large-cap index fell 12% in August alone, leaving the market at the mercy of its smaller peers.

Altcoins outperform BTC | Source: Arcane Research

In a surprising turn of events, the small and mid-cap indices each fell 10%. Normally, in a market like this, investors would dump en masse from both indices as they can be very volatile. However, they have proven to be a better safe haven through this market compared to Bitcoin and the Large Cap Index. Despite this, every index recorded double-digit declines, which is never a good sign for the crypto market.

Stablecoins are regaining their dominance

Bitcoin still remains the most dominant cryptocurrency in the market but is losing that boast day by day. As the price has dropped and investors fear the worst, they have switched to stablecoins instead to provide a much-needed hedge against market volatility. Against this backdrop, stablecoin dominance continues to increase.

Bitcoin dominance chart from TradingView.com

Dominance recovers to 40.18% | Source: Market Cap BTC Dominance on TradingView.com

For another week, Bitcoin’s dominance has declined again, this time by 0.65%, and stablecoins have stood on the sidelines to soak it all up. USDT saw its market dominance increase by 0.15%, while USDC saw its dominance increase by 0.11%. BUSD, another strong competitor, added another 0.06% to its dominance over the same period.

Interestingly, despite the poor performance of the large-cap index, Ethereum has also seen its market dominance increase. The altcoin, whose upcoming “merge” has caused much excitement in the market, saw its market dominance increase by 0.24%.

Bitcoin dominance hit a new 7-month level on Aug. 30 when it fell to 39.35%. Ethereum’s market dominance now stands at 19.81%. With USDT, USDC and BUSD at 6.81%, 5.27% and 1.94% respectively.

Featured image by Prestmit, charts by Arcane Research and TradingView.com

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