Key Takeaways
The altcoin market has performed relatively well against Bitcoin since 27 June, but it was not remotely close to the altcoin season we saw in the previous two cycles. The altcoin market cap and Bitcoin Dominance charts gave vital clues for when such an altseason might arrive.
The much-anticipated altcoin season is not yet here. On the contrary, Bitcoin [BTC] has continued to make new all-time highs lately. It would need to enter a consolidation phase to allow capital to rotate into altcoins, which can then allow the altcoin market to catch up.
The recent rally past $122k happened without the Bitcoin market overheating. This meant that the rally had legs, and altcoin investors have to wait their turn. However, it may not be all doom and gloom for them.
Especially since Ethereum [ETH] charged towards $3k, and could break higher on the back of heavy demand. A rallying ETH could help birth an altcoin season.
Altcoin Season Index at 33, Bitcoin Dominance trends south
Source: Blockchain Center
At the time of writing, data revealed that the altcoin season index was still low. A reading below 25 implies BTC season, while a reading above 75 is required to signal an altcoin season.
The last time this happened was in November 2024. At the time of writing, the index was just above the 30-mark, a level it has not convincingly breached since March.
Source: BTC.D on TradingView
To understand if the altcoin season can progress, Bitcoin Dominance can be studied.
A falling BTC.D demonstrates altcoin market cap is growing faster than Bitcoin. This has been the case since 27 June. The BTC.D metric has fallen a mere 2.07% in just over two weeks. And yet, the effect is already profound.
Source: TOTAL2 on TradingView
The altcoin market has expanded beyond the $1.25 trillion market cap resistance zone. From a technical analysis perspective, the breakout past this key resistance may be an early sign of bullish intent. It might be highly likely that the altcoin market cap could expand to challenge the December high at $1.64 trillion in the coming weeks.
In order for that to happen, Bitcoin would need to grow further. Altcoin holders would want to see a large rally for Bitcoin, leading the crypto market. Usually, the final weeks of this rally result in capital rotation that sends altcoins gaining multiples in value in a short time – An altcoin season.
Source: BTC.D on TradingView
Such a phenomenon is usually accompanied by a free fall in the BTC.D, as shown above.
The final months of 2017 and the first half of 2021 both saw the BTC.D fall to the 40%-mark. At the time of writing, the BTC.D was at 64.65%, a long way from 40%. Hence, it is still unclear if this cycle would be different. Only time would tell.
Next: Thanks to THIS macro signal, Bitcoin’s ATH case just got stronger!
