Bitcoin dominance rejects 60% as altcoin rotation gathers pace

Bitcoin's market dominance fell back below 60% on June 6, rejecting the resistance level as altcoin rotation accelerated across major tokens.

"Capital is rotating out of bitcoin into altcoins as traders seek higher beta exposure during a macro-driven correction," Mati Greenspan, founder of Quantum Economics, said.

A notable Ethereum whale sold their entire ETH position and allocated the proceeds across five altcoins — LIT, VVV, NEAR, ZEC and HYPE — according to a report by BSCN. The highest allocation went to Lit Protocol (LIT), suggesting conviction in decentralized content networks, while Zcash (ZEC) and Hyperliquid (HYPE) represented bets on privacy and DeFi respectively.

The rotation comes as bitcoin briefly pierced $60,000 overnight before recovering to around $61,000, down 1.3% on the day. The broader market rout triggered $1.6 billion in liquidations across roughly 308,000 traders over 24 hours, with longs accounting for $1.21 billion, according to Coinglass. Bitcoin alone saw $534 million in liquidations, while ether recorded $423 million. Ether fell 21.6% over the past seven days to $1,575, while solana dropped 23.7% to $63.

A sustained breakdown below 60% in bitcoin dominance typically signals a multi-month altcoin rally, as capital rotates from the largest cryptocurrency into smaller tokens. The question now is whether the macro backdrop — a strong US jobs report that pushed swaps to price a rate increase by year-end — will sustain or derail the rotation.

Whale Rotation Targets Privacy, AI and DeFi Tokens

The five tokens in the whale's portfolio span distinct blockchain categories. Zcash, trading around $559 after a 10.18% daily decline, remains the leading privacy-focused project despite a disclosed bug in its Orchard privacy pool that triggered a 44% collapse earlier this week. NEAR Protocol, an AI-focused L1 blockchain, and VVV, a token tied to decentralized AI inference, reflect growing crossover between crypto and artificial intelligence. Hyperliquid's HYPE, which outperformed through most of the recent market bleed, is down 9.9% over the past week.

The diversification away from large-cap coins into sector-specific bets mirrors a broader trend. Bitcoin's dominance rejection at 60% suggests the market is entering a phase where capital flows favor altcoins over BTC, a pattern historically associated with altseason rallies. However, the macro environment remains a headwind: US spot bitcoin ETFs recorded $3.45 billion in outflows across 11 consecutive sessions, while blockbuster AI IPOs — including Anthropic's $50 billion listing and SpaceX's $75 billion offering — continue to draw speculative capital away from crypto.

If the dominance rejection holds, altcoins could see significant inflows in the weeks ahead. But Greenspan cautioned that a reversal in AI sentiment could hit crypto twice. "If AI sentiment cracks, bitcoin could get hit twice: first from liquidity leaving crypto, and then again from a broader risk-off move across markets," he said. "I would be careful assuming the bottom is already in."

This article is for informational purposes only and does not constitute investment advice.