Is altcoin season coming? Analysts weigh in

Bitcoin's dominance in the cryptocurrency market shows subtle signs of weakening, leaving crypto analysts divided on the timing of the next altcoin season.

CoinGecko data reveals a nearly 42% decline in the altcoin market cap from its all-time high of over $1.89 trillion in early December 2024. This rally was fueled by optimism surrounding the U.S. presidential election results. However, despite subsequent regulatory developments, the altcoin market hasn't recovered. Ethereum (ETH), the largest altcoin, is down 17.3% over the past month, while other major players like XRP, Solana, Dogecoin, and Cardano have experienced declines ranging from 14% to 30%.

Altseason's Dependence on Bitcoin Dominance

With bearish momentum persisting in the altcoin market, the crypto community eagerly awaits signs of the next altcoin season. Many market experts believe a decline in Bitcoin dominance is crucial for altcoins to rally.

Pseudonymous trader Daan Crypto Trades attributes the lack of altcoin dominance to Bitcoin's strength and the growing stablecoin market. He argues that for altcoins to regain dominance, ETH/BTC needs to gain momentum first, as many coins are built on Ethereum and utilize ETH-denominated liquidity pools. A strong ETH performance, he suggests, creates the necessary wealth effect to drive broader altcoin rallies. While short-lived rallies may occur, Daan emphasizes that a sustained altcoin trend typically requires high-timeframe confirmation, often following a retest after the initial breakout. He advises patience or strategic dollar-cost averaging into fundamentally strong projects.

Georgii Verbitskii, founder of TYMIO, shares a similar view, describing the current altcoin market as a "waiting game." He believes a true altseason, characterized by Bitcoin consolidation and independent altcoin rallies, will only follow Bitcoin surpassing its previous all-time high. Until then, he expects investors to perceive altcoins as riskier, keeping significant capital on the sidelines.

Jamie Coutts, Real Vision's chief crypto analyst, anticipates "one last rally" this cycle, possibly by June, but predicts only altcoins with genuine utility and active networks will benefit. He highlights the importance of "activity driving prices," emphasizing that only "quality altcoins" will see substantial recovery.

Technical analyst Rekt Capital also believes altseason is inevitable but anticipates its commencement only after Bitcoin dominance falls from its current level (around 62.1%) to approximately 71%, as indicated in a chart he shared.

Conflicting Signals

Market commentator Sensei suggests Bitcoin dominance might have already peaked, citing a rising wedge pattern on the BTC Dominance chart – a formation often interpreted as a potential reversal indicator.

However, several key indicators contradict this optimism. Capriole's Altcoin Speculation Index, tracking investor appetite for high-risk altcoins, has fallen to 12%, a more than 50% drop since December. Similarly, CoinMarketCap's Altcoin Season Index, comparing altcoin and Bitcoin performance over 90 days, stands at only 14 out of 100, indicating a market firmly in "Bitcoin Season."