Key Points
- The crypto market is divided on the arrival of the altcoin season, with Bitcoin’s dominance standing at over 60%.
- Despite Bitcoin’s dominance, some crypto enthusiasts anticipate a shift towards altcoins, possibly triggered by eased crypto regulations or new ETF approvals.
Despite the total crypto market cap maintaining its position above the $3 trillion mark, the crypto community is split on whether an altcoin season is imminent.
With the crypto market cap, excluding Bitcoin (BTC), standing at $1.12 trillion, Bitcoin’s market dominance is over 60%.
Signs of a Possible Altcoin Rally
Bitcoin’s substantial dominance over the crypto market implies a weakness in the altcoin sector. However, a section of crypto enthusiasts is optimistic about a swift shift in market dynamics. They ponder whether the forthcoming relaxation of crypto regulations or the approval of new ETFs could trigger a new altcoin season.
A recent tweet by a technical crypto trader, Titan of Crypto, suggests the possibility of an altcoin season’s arrival. The trader used the weekly chart of Bitcoin dominance to highlight a significant altcoin signal marked by the higher price ejection in the weekly candle.
The bearish divergence in the weekly RSI line is the signal. As Bitcoin dominance continues to surge, the RSI line is forming a lower high. This indicates a potential decline in Bitcoin dominance, which could trigger the next altcoin season.
Supporting the idea of a sharp decline in Bitcoin dominance, a recent post by Carl Moon reveals a rising wedge pattern. Within this pattern, Bitcoin dominance near 61.38% is likely to break under the local support trendline, potentially leading to a spike in altcoin prices.
Historical Data Suggests Otherwise
Recent developments in the crypto market, particularly in the altcoin segment, have limited the chances of an alt season. A post by Daan Crypto Trades highlights a key historical trend in the Bitcoin vs. Altcoin performance cycle.
Using the chart of the total crypto market cap divided by Bitcoin, the analyst provides the relative performance of Bitcoin and altcoins. The historical trend shows past cycles where a significant move in Bitcoin was followed by sharp surges in the total crypto market cap, excluding Bitcoin and Ethereum.
This sharp surge indicates a steep decline in Bitcoin dominance, marking the start of an alt season. However, Daan Crypto Trades pointed out that the chart of Bitcoin dominance vs. total altcoin market cap has yet to reach a significant high, which would typically signal an altcoin breakout.
Therefore, a potential surge in Bitcoin is likely before the next altcoin season. Furthermore, the rapid creation of altcoins in the recent cycle and the ease of creating more has led to quick dilution. With increasing competition, the chances of an alt season have significantly decreased. This suggests that the current cycle is fundamentally different from previous altcoin season cycles.
Investor Sentiment and Altcoin Season
Offering another perspective on the chances of an altcoin season, the altcoin vs. Bitcoin season chart currently stands at a value of 44. An altcoin season typically occurs at a value of 75, while a value of 25 indicates a Bitcoin season.
As the current chart is under 50, a stronger Bitcoin dominance is clearly visible across the crypto market. Therefore, the current conditions in early 2025 suggest limited chances of an altcoin season until the approval of new ETFs.
However, with easier regulations and the upcoming altcoin ETFs for coins like Solana, Litecoin, and XRP, the institutional flow of funds will likely trigger demand for altcoins, potentially starting the new altcoin season.
