Bitcoin's Dominance Persists as Analyst Points to Laggard Altcoins
In the world of cryptocurrency, the buzz is all about the potential altcoin season that could be on the horizon. According to Darkfost, an on-chain analyst, while improvements have been observed in the altcoin market, its performance is relatively weaker than Bitcoin's in this cycle.
Historically and currently, altcoin seasons are primarily characterized by the performance of altcoins relative to Bitcoin and Bitcoin dominance metrics in the cryptocurrency market.
One key indicator is the Bitcoin dominance (BTC.D), which measures Bitcoin’s market capitalization as a share of the total crypto market cap. A decline in Bitcoin dominance below around 60% (with more extreme altcoin seasons below 50%) signals a rotation of capital into altcoins, often preceding an altcoin rally. Recently, Bitcoin dominance dropped from over 65% in May 2025 to about 59% by August 2025—a level not seen since early 2025—that has coincided with rising altcoin capitalization and suggests a potential altcoin season ahead.
Another important indicator is the Altcoin Season Index, which tracks how many altcoins outperform Bitcoin over a 90-day period. When at least 75% of the top 50 altcoins outperform Bitcoin over this time frame, it is defined as an altcoin season. While the index is rising, it has not yet crossed the 75-point threshold, signaling an emerging but not yet full altcoin season.
The altseason is often marked by capital rotation from the largest cryptocurrency to the rest of the market. This rotation is driven by a number of factors, including a Bitcoin bull run and halving cycle, increased institutional interest, particularly in Ethereum and layer-1 altcoins like Solana, and rising futures open interest and ETF inflows into altcoins.
The current market conditions align strongly with these indicators. For instance, Ethereum has reclaimed the $4,000 mark for the first time since December 2024, and the price of XRP has surged above $3, increasing by more than 10% in the past week. The altcoin market is currently valued at over $1.55 trillion, reflecting an over 12% increase in the past seven days.
However, it's important to note that the altseason, a period when mid/small-cap altcoins outperform BTC, is not yet in full gear. The market cap growth of Bitcoin, large-cap altcoins, and mid-to-small-cap altcoins is being carefully monitored using 365-day and 30-day moving averages. Rapid market cap growth is indicated when the 30-day moving average rises faster than the 365-day moving average, while a lagging 30-day moving average indicates slow growth momentum.
The last true altcoin season was in early 2024, a fact that serves as a useful reference point for analysts. However, Darkfost has postulated that the altseason has not yet started, citing a similar performance pattern seen earlier in the year before the general market experienced a severe downturn.
In conclusion, while the signs are promising, it's too early to declare the start of the altcoin season. However, the current narrative in the digital asset market is undeniably focused on this potential development. As always, it's essential for investors to conduct thorough research and consider their risk tolerance before making any investment decisions.
[1] Coindesk. (2025). What is Bitcoin Dominance and Why Does It Matter? [online] Available at: https://www.coindesk.com/info/what-is-bitcoin-dominance-and-why-does-it-matter/
[2] Investopedia. (2025). Altcoin Season. [online] Available at: https://www.investopedia.com/terms/a/altcoinseason.asp
[3] Cointelegraph. (2025). Bitcoin dominance drops to 59% as altcoin season signals flare. [online] Available at: https://cointelegraph.com/news/bitcoin-dominance-drops-to-59-as-altcoin-season-signals-flare
[4] Decrypt. (2025). Altcoin Season Index Is Flashing Green, But Is It Time to Buy? [online] Available at: https://decrypt.co/85582/altcoin-season-index-is-flashing-green-but-is-it-time-to-buy
[5] The Block. (2025). Altcoin Season Index: What It Is and Why It Matters. [online] Available at: https://www.theblockcrypto.com/post/116311/altcoin-season-index-what-it-is-and-why-it-matters
- The potential altcoin season in the cryptocurrency market is being closely observed, driven by improvements in altcoin performance relative to Bitcoin and declines in Bitcoin dominance.
- Historically, an altcoin season is characterized by a rotation of capital from Bitcoin into altcoins, signaling a decline in Bitcoin dominance below 60%.
- The Altcoin Season Index, which tracks how many altcoins outperform Bitcoin over a 90-day period, is a key indicator for an altcoin season, with at least 75% of the top 50 altcoins outperforming Bitcoin being a defining factor.
- The current market conditions, such as Ethereum reclaiming the $4,000 mark and XRP surging above $3, align with the indicators for an altcoin season, while the Altcoin Season Index has not yet crossed the 75-point threshold.
- It's important to note that the altcoin season, a period when mid/small-cap altcoins outperform Bitcoin, is not yet in full gear, and the market cap growth of various cryptocurrencies is being closely monitored.
- The current narrative in the digital asset market is focused on the potential altcoin season, but it's too early to declare its start, emphasizing the need for thorough research and risk assessment before making investment decisions.
