With Bitcoin dominance falling and altcoin market cap rising, are the conditions finally aligning for an altcoin season?
Summary
- Ethereum has gained nearly 30% in a week, outperforming Bitcoin and nearing its all-time high, while pulling in record ETF inflows and institutional attention.
- Bitcoin Dominance has dropped below 60% for the first time in six months, ending a 1,020-day climb and hinting at a possible shift in market leadership.
- Despite growing signs, the Altcoin Season Index remains neutral at 51, suggesting the market hasn’t yet met the historical thresholds for a true altcoin season.
- Key metrics like ETF flows, trading volumes, and capital rotation show early movement, but a full altcoin breakout still needs broader confirmation across tokens and sectors.
Is the altcoin season back?
For the first time in a long while, Ethereum (ETH) is making waves not just as a leading asset but as a potential trigger for altcoin season
Over the past week, ETH has gained nearly 30%, vastly outpacing Bitcoin’s (BTC) 5% rise, pushing ETH’s price to an intraday high of $4,715, just a few steps short of its 2021 all-time high. But what’s catching wider attention is what the climb might represent.
Altcoin season, a period when non-Bitcoin crypto assets start outperforming, has been mostly dormant since early 2022. But several signs now point to a potential reversal. ETH’s renewed dominance is one of them.
On-chain analytics firm Glassnode noted this week that Ethereum is once again behaving like a bellwether, not just moving independently, but potentially setting the tempo for the rest of the market.
Supporting that idea is a wave of fresh capital. Over the past six days, spot Ethereum ETFs have brought in $2.3 billion in net inflows, including a record-setting $1 billion in a single day.
Since July began, ETH ETFs have pulled in $1.5 billion more than their Bitcoin counterparts, reversing the usual pattern.
That surge in interest isn’t limited to ETFs. Institutional treasuries now hold over $16.5 billion worth of ETH, with entities like BitMine, SharpLink, and Ether Machine leading accumulations.
Meanwhile, Ethereum’s on-chain metrics remain strong. With total value locked in DeFi near $96 billion, over 60% of the market, the network continues to serve as the base layer for real activity.
Put together, these metrics raise the question of whether the broader market is about to flip, with Ethereum once again acting as the opening note of an altcoin resurgence.
Bitcoin dominance and the signs of rotation
Bitcoin’s share of the total crypto market is beginning to fade. After reaching a cycle high of nearly 66% in June, Bitcoin Dominance has dropped over 7 percentage points to around 58.4%, falling below the 60% threshold for the first time in six months.
The change marks the end of one of the longest upward streaks in Bitcoin Dominance history, lasting more than 1,020 days.
Analysts tracking the metric note that the decline follows the completion of a long five-wave structural pattern, often seen as a transition point in market leadership cycles.
Bitcoin Dominance measures Bitcoin’s market cap relative to the total crypto market cap. A lower value suggests that altcoins are occupying a larger share of investor interest and capital.
The recent decline has coincided with the altcoin market cap nearing a fresh all-time high, reinforcing the idea that attention is beginning to rotate away from Bitcoin and toward a wider range of assets.
However, data from the Altcoin Season Index adds a layer of caution. The index, which tracks momentum across multiple altcoins, currently sits at 51, a neutral zone. It is neither Bitcoin season nor Altcoin season.
On average, altcoin seasons tend to last about 18 days, with the longest streak recorded at 117 days. The current streak without an altcoin season has stretched past 240 days, suggesting that the market has remained heavily Bitcoin-centric for an extended period.
Even so, the underlying setup is changing, with multiple indicators showing the earliest signs of transition.
Taken together, the drop in Bitcoin’s dominance, the rising market share of altcoins, and the length of the current wait since the last altcoin season all suggest a possible tipping point.
What confirms an altcoin season?
One of the most common questions during transitional phases is how to know whether an altcoin season has truly arrived. While the term is often used loosely, the market has developed a few reliable benchmarks to identify these periods with more precision.
Historically, altcoin seasons are marked by a clear and sustained outperformance of altcoins over Bitcoin across several dimensions — market cap growth, trading volume, and capital inflows.
The Altcoin Season Index offers a structured way to measure this. According to its methodology, an altcoin season is typically confirmed when at least 75% of the top 50 altcoins outperform Bitcoin over the last 90 days.
At present, the score sits at 51, far below that threshold. The index has only crossed into clear altcoin territory 404 times in recorded history, compared to 953 instances where Bitcoin maintained dominance.
The current run without an altcoin season has lasted over 240 days, while the average duration between such periods is just 66 days, placing the market in unusually extended neutral territory.
Another signal involves tracking the relative market cap growth of layer 1 and layer 2 tokens versus Bitcoin.
During the last major altcoin cycle in early 2021, assets like Solana (SOL), Cardano (ADA), and Avalanche (AVAX) posted triple-digit percentage gains within 60-day windows while Bitcoin traded sideways.
So far in the current market, few altcoins outside of Ethereum have posted sustained breakouts relative to BTC.
Trading volume rotation is also a key sign. During altcoin seasons, centralized and decentralized exchanges typically report a higher volume share for altcoins.
For example, during the 2021 cycle, Binance’s top 10 volume leaders shifted from BTC and ETH to include meme coins, gaming tokens, and mid-cap L1s.
At present, volume is still largely concentrated in Bitcoin and Ethereum pairs, with minimal spillover into smaller assets.
ETF inflow ratios are a more recent addition to the toolkit. With ETH ETFs now consistently outperforming BTC ETFs in net capital inflows, early signs of altcoin interest are emerging, but the effect remains limited to large-cap tokens.
No altcoin-focused ETF has yet emerged as a strong driver of broader flows.
In short, a confirmed altcoin season requires more than price movement in a few tokens. These conditions are not yet fully present, but the current environment is showing some of the early ingredients.
As always, there is never a guarantee in the crypto market. Trade wisely and never invest more than you can afford to lose.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
