Bitcoin Surges to $125K, Dominance Nears 60% as Altcoins Lag Behind

Bitcoin Soars to $125,000, Dominance Nears 60% as Altcoins Struggle to Catch Up

Bitcoin (BTC) continues to assert its dominance over the cryptocurrency market, smashing through the $125,000 all-time high this weekend and drawing massive capital inflows away from altcoins. The flagship digital asset surged over 11% in the past week, according to data from CoinGecko, cementing its position as the market’s primary driver and signaling renewed institutional confidence amid growing macroeconomic uncertainty.

Bitcoin Hits Record $125,506, Market Dominance at 59%

The world’s first cryptocurrency reached a record-breaking $125,506 on Sunday, October 5, during the Asia trading session, as trading volumes spiked to nearly $50 billion in 24 hours. The surge propelled Bitcoin’s market dominance to nearly 59%, marking its highest level in three weeks, according to CoinGecko.

Experts attribute this upward momentum to a confluence of macroeconomic and structural factors. Among them are a $1 billion release of frozen assets from the defunct FTX exchange and a stablecoin market capitalization surge to $300 billion last week.

“This facilitated capital inflows to Bitcoin, pushing its dominance close to 60%,” — Stephen Gregory, Founder of Vtrader, speaking to Decrypt.

The result has been a wave of short liquidations, with over $200 million in BTC short positions forced into buy-backs in the last 24 hours, according to CoinGlass. Nearly half of that — around $100 million — was liquidated within a single hour, showcasing the intensity of bullish momentum driving Bitcoin’s latest breakout.

Institutional Inflows Power Bitcoin’s Momentum

Institutional investors are once again leading the charge. The recent spot Bitcoin ETF inflows—which now exceed $49 billion in lifetime tally—have been a major catalyst for Bitcoin’s climb. This surge has reignited faith in Bitcoin as a “market anchor” and a “digital gold” equivalent, particularly amid global economic turbulence.

“It’s pretty normal for investors to pile into Bitcoin first during bull runs,” — Shivam Thakral, CEO of BuyUcoin.

“Bitcoin remains the market’s anchor — the most trusted and liquid crypto asset in times of both excitement and uncertainty.”

Gracy Chen, CEO of Bitget, echoed these sentiments, emphasizing Bitcoin’s role as a safe-haven asset:

“The dominance metric is a clear signal of capital gravitating toward the market’s most trusted asset amid renewed institutional demand and broader volatility.”

FTX Funds and Stablecoin Growth Fuel Rally

A major catalyst for the current rally is the release of $1 billion in previously frozen FTX funds, which has reintroduced significant liquidity into the market. Simultaneously, the stablecoin market’s 2025 expansion reflects investor readiness to deploy capital rapidly.

These combined factors have created a “perfect storm” of liquidity that has primarily flowed into Bitcoin rather than altcoins, intensifying BTC’s dominance.

As of Monday, Bitcoin’s market capitalization stands at approximately $2.45 trillion, accounting for nearly 60% of the global crypto market cap, which recently hit $4.35 trillion according to CoinMarketCap — a figure that now surpasses the GDP of the United Kingdom.

Is This the End of Altseason? Experts Weigh In

The recent Bitcoin rally has left many altcoins lagging behind. Major projects such as Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA) have experienced modest gains, but nowhere near Bitcoin’s explosive rise.

This divergence has sparked debate over whether the market is entering — or skipping — the long-anticipated “altcoin season”, a period where altcoins significantly outperform Bitcoin.

Bitcoin Nears $125K ATH as Shutdown Boosts Rally; BNB and Meme Coins Explode

However, analysts caution that altseason is not necessarily over.

“This doesn’t mean the end of alt season,” Gregory explained. “But Bitcoin’s declining bullish momentum may lead to a bear trap that could flush out more leverage before the market resumes its ascent.”

If Bitcoin’s dominance fails to push significantly above 60%, analysts expect capital to rotate toward altcoins, potentially triggering an altcoin rally in the coming weeks.

Prediction markets on Myriad, launched by Decrypt’s parent company DASTAN, currently show a 60% probability of Bitcoin’s dominance rising to 64%, down from 69% at the beginning of October. This decline in bullish expectations could signal the start of sector rotation into high-conviction altcoins.

The Waiting Game: Altcoin Rotation May Follow BTC Consolidation

Gracy Chen of Bitget believes a true altcoin season may still be a few weeks away. According to her, the key metric to watch will be Bitcoin’s dominance dropping below 55%, which could serve as the technical trigger for a massive capital rotation into AI, DeFi, and Layer-2 projects.

“We’re seeing sidelined liquidity waiting for Bitcoin’s consolidation before moving into sectors like AI, DeFi, and layer-2 ecosystems,” Chen said.

This sentiment aligns with historical patterns where altcoins typically rally after Bitcoin peaks and consolidates. The consolidation phase allows traders to lock in BTC profits and redeploy capital into more speculative, high-growth tokens.

Market Sentiment Remains Bullish Despite Rotation Concerns

Despite uncertainty around capital rotation, the broader market sentiment remains highly positive. Le Shi, Managing Director at Auros, an algorithmic trading and market-making firm, emphasized that the current environment remains favorable for continued growth.

“It is a very good time for the markets, and is likely going to remain that way for the short-term foreseeable future,” Shi said.

The optimism extends to institutional circles, where Bitcoin’s performance continues to validate its role as a hedge against inflation, store of value, and digital reserve asset.

Technical Outlook: Can Bitcoin Hold Above $125,000?

From a technical perspective, Bitcoin’s immediate resistance lies near $126,000, with analysts eyeing potential extensions toward $130,000 if bullish momentum continues. Support remains near $118,000, representing the short-term demand zone that has repeatedly held since late September.

The Relative Strength Index (RSI) remains elevated, suggesting that BTC may face short-term consolidation before the next leg upward. However, long-term indicators remain decisively bullish, driven by robust ETF inflows, institutional accumulation, and macro uncertainty that continues to favor hard assets.

Bottom Line

Bitcoin’s record-breaking move past $125,000 signals not just another milestone, but a powerful reaffirmation of institutional confidence in the crypto market. While altcoins have lagged behind, history suggests that a capital rotation may soon follow once Bitcoin begins to consolidate.

Whether or not the elusive altseason emerges before year-end, one thing is certain: Bitcoin remains the heartbeat of the crypto market, setting the tone for a bullish Q4 2025 and beyond.