Bitcoin market cap share surpasses 60%: On-chain activity decline reveals the truth about capital rotation

Bitcoin market share climbed to the 60% – 61.3% range in early May 2026, marking the strongest level since mid-2025 and the first sustained break above the psychological 60% threshold in 2026.
This is not just a technical breakthrough—it signifies a clear shift in the overall capital structure of the crypto market.

From historical patterns, Bitcoin’s market share typically fluctuates between 40% and 70%.
The 60% level is a mid-to-high critical point, both psychologically and technically.
When Bitcoin’s market share exceeds 60%, it indicates capital is flowing predominantly into Bitcoin rather than rotating into altcoins.
Historically, such a structure appears during early to mid bull markets or periods of macro uncertainty, where investors prioritize the most liquid and secure assets within crypto.
Sustained above-60% market share essentially reflects a cyclical “certainty premium” vote from the market.

What structural changes are on-chain transaction volume and active users experiencing?

The rise in Bitcoin’s market share is not an isolated technical indicator—it is accompanied by a synchronized cooling in on-chain activity for ETH and SOL—forming a complete structural picture.

Ethereum’s on-chain data shows multi-dimensional weakening.
Over the past week, Ethereum’s weekly transfer count decreased by 10%, down to 4.79 million;
active wallet addresses decreased by 8%, down to 2.5 million.
Decentralized exchange (DEX) weekly trading volume also declined significantly, with data as of May 8 showing DEX volume dropped to $1.64 billion, a 46% decrease over the past three weeks.
Parallel to ecosystem contraction, the total value locked (TVL) in Ethereum DeFi protocols has fallen to $124.7 billion, the lowest since May 2025.

Solana’s on-chain activity also contracted.
Weekly active addresses plummeted from a high of 5.01 million in February to 2.89 million, a 42% drop.
Notably, Solana’s social media sentiment diverges sharply from on-chain data—bullish sentiment far exceeds bearish sentiment, with sentiment indicators hovering around 3.2, meaning each bearish comment on social media is met with over three bullish ones.
This “bullish sentiment, bearish data” pattern suggests current optimism for Solana is mainly narrative-driven rather than supported by actual network usage.

What kind of asymmetric distribution is institutional capital showing on the spot market?

CryptoQuant’s analysis indicates that the rebound of Bitcoin and Ethereum in 2026 is driven by fundamentally different demand conditions, shaping the next market trajectory.

Bitcoin’s recovery reflects ongoing institutional spot accumulation—investors are buying BTC on spot markets and transferring it off exchanges for long-term storage, reducing available sell-side supply.
On May 4, US spot Bitcoin ETFs saw a single-day net inflow of $532 million, with total net inflows in April reaching $2.44 billion, the strongest monthly institutional buying in nearly eight months.

Ethereum, on the other hand, presents a different picture.
Ethereum appears to be stabilizing mainly because selling pressure has eased, not because new spot demand is emerging.
On May 4, US spot Ethereum ETFs reported net inflows of $61.29 million, but CryptoQuant notes that ETH’s capital flows in scale and persistence still do not match Bitcoin’s.

The core difference is:
Bitcoin’s rebound is driven by spot demand (positive demand),
Ethereum’s stability is mainly due to easing sell pressure (negative easing),
not new buyer entry.
Without systemic Bitcoin position risk exposure, ETH’s price is unlikely to replicate Bitcoin’s strength without a narrative shift.

Is the market currently in a Bitcoin season or transitioning into an altcoin season?

While Bitcoin’s market share remains above 60%, another concurrent indicator change is happening.

The 90-day Altcoin Season Index has risen from the bottom range of Bitcoin dominance at around 20 to approximately 28.6.
However, the official threshold for “Altcoin Season” is 75, meaning at least 75% of top altcoins outperform Bitcoin over the past 90 days.
Currently, the index is still 47 points below that threshold, even larger than the increase from the bottom of Bitcoin dominance.
In terms of trading volume ratio, current altcoin trading volume relative to the top five assets is about 0.3–0.4, whereas during the 2021 altcoin season peak, this ratio exceeded 2.0—indicating the current rotation scale is only about 15%–20% of the last true altcoin season.

“Market is in a Bitcoin season” remains the most accurate current assessment.
Capital rotation direction is clear, but the extent is still in the “confirmation of initiation” rather than “completion of initiation” stage.

How do new supply unlock expectations influence short-term market structure?

Another structural factor supporting Bitcoin’s >60% market share is the supply pressure from altcoin unlocks.

By May 2026, over $2.2 billion worth of altcoins are expected to enter circulation, which could bring short-term selling pressure and increase volatility, especially among mid-cap assets.
Historically, when Bitcoin’s dominance stays above 60%, even if Bitcoin prices remain stable, altcoins can experience corrections of 15%–35%.

Ethereum’s unlock pressure is particularly prominent.
The ETH unlock queue has grown over 72,000% in two weeks, reaching 530,985 ETH waiting to be unlocked as of May 2.
Previous large-scale DeFi security incidents in April 2026 caused a record $625 million in losses, including the KelpDAO bridge attack ($292 million loss) and over $15 billion in funds drained from Aave, which heightened risk aversion among investors.
The combination of large unlock expectations and on-chain security events reinforces a short-term structural bias toward continued Bitcoin concentration.

Is 60% a critical point or the start of a long-term trend?

From a technical perspective, 60% has multiple implications.

Bitcoin’s current market share trades between 60% and 61.3%, with the 58%–61% range being a key accumulation and breakout zone.
Traders typically focus on three main zones:

• Above 63% indicates a continued bull market, with Bitcoin maintaining dominance and altcoins possibly suppressed;
• 58%–60% is a critical balance zone, with market rotation between Bitcoin strength and early altcoin recovery;
• If weekly closes confirm below 60%, it may signal the start of large-scale rotation into altcoins, and below 50% could indicate a full altcoin season environment.

If Bitcoin’s market share remains above 60% and ETH fails to show similar sustained spot demand, CryptoQuant expects Bitcoin’s dominance to stay high.
Conversely, if ETH develops comparable spot demand, capital rotation from Bitcoin to broader markets could trigger a broader altcoin rebound.

In the long-term, Bitcoin’s market share has gradually risen from around 40% to nearly 60%, a trend ongoing since 2022.
Some research suggests it could approach 70% by 2030.
This indicates that the current structural shift is not just a transient fluctuation but a phase in the evolving long-term market power landscape.

Summary

Bitcoin’s market cap share broke above 60% for the first time in early May 2026 and has remained above that level, marking a significant shift in the crypto market’s capital structure.
Key systemic drivers include: macro uncertainty driving capital into Bitcoin, institutional accumulation via spot ETFs creating structural buy-side demand, weakening on-chain fundamentals for ETH and SOL leading to capital outflows, and over $2.2 billion of new altcoin supply expectations intensifying capital concentration in Bitcoin.
The current altcoin season index is around 28.6, still far from the 75 threshold, indicating the market remains in a clear “Bitcoin season.”
60% is not only a technical boundary of the current market structure but also a potential long-term critical point for future capital allocation patterns.

FAQ (Frequently Asked Questions)

Q: What does a 60% market share of Bitcoin imply?
A: 60% is an important psychological and technical threshold in market capital structure.
When Bitcoin’s market share stays above 60%, it generally indicates high capital concentration in Bitcoin, with altcoin performance and capital inflows suppressed, and the market in a “Bitcoin season.”

Q: What are the main reasons for the decline in ETH on-chain activity?
A: Multiple factors:

• DEX trading volume down 46% over three weeks;
• DeFi TVL falling to the lowest since May 2025;
• Record $625 million losses from security incidents;
• Large-scale ETH unlocks leading to liquidity withdrawals from staking pools;
• Elevated sell pressure from US investors compared to global averages.

Q: Why does Solana’s on-chain data decline diverge from market sentiment?
A: Solana’s social media sentiment ratio has risen to about 3.2 (positive/negative), indicating increased attention.
But weekly active addresses have dropped 42% from February’s high, and despite continuous net inflows into ETFs, on-chain active addresses have fallen to 2.89 million, showing a short-term disconnect between price and fundamentals.

Q: How low must Bitcoin’s market share fall to confirm the start of an altcoin season?
A: Traders typically use weekly closes as a benchmark.
A weekly close below 60% may signal early rotation into altcoins; below 50% indicates a full altcoin season environment.
Currently, the altcoin season index is about 28.6, still well below the 75 threshold.

Q: What conditions must ETH meet to attract capital back?
A: CryptoQuant suggests ETH needs to demonstrate sustained spot demand comparable to Bitcoin to trigger broader altcoin rebounds.
Before that, institutional capital mainly relies on Bitcoin spot demand.
On-chain activity for ETH also needs to substantially recover, including a rebound in DeFi TVL and DEX trading volume.