tl;dr
Altcoins have shown significant growth recently, with indicators pointing to a potential altcoin season by September, defined by most top altcoins outperforming Bitcoin. Bitcoin dominance has fallen from over 65% in May to about 59%, signaling capital rotation into altcoins. Retail capital on the si...
Altcoins have experienced notable growth recently, and market indicators suggest a potential shift away from Bitcoin dominance toward a broader altcoin season, according to Coinbase. David Duong, Coinbase Institutional’s global head of research, highlighted in a monthly outlook report that current conditions point to the approach of a full-scale altcoin season by September. This phase is defined by at least 75% of the top 50 altcoins outperforming Bitcoin over the previous 90 days.
Duong also noted the presence of significant retail capital waiting on the sidelines within money market funds, alongside expectations of Federal Reserve easing, which could boost retail participation. The US Consumer Price Index (CPI) data showing inflation at 2.7% year-over-year has elevated the probability of a September rate cut to 92%, according to futures markets. Lower interest rates typically attract fresh capital, often benefiting high-risk assets like altcoins.
Bitcoin dominance—the market share of Bitcoin in the overall crypto market—has declined from above 65% in May to around 59% by August. This drop signals early capital rotation into altcoins, reinforcing altseason expectations. Bitcoin dominance currently sits at approximately 59.5%, its lowest since late January. Crypto day trader Ito Shimotsuma observed that this monthly bearish cross in Bitcoin dominance hadn’t occurred since January 2021 and previously led to a four-month altcoin rally, which might repeat and extend into December 2025.
While altcoin season indexes have steadily climbed from mid-20s to mid-40s or low 50s, they remain below the 75 mark traditionally signifying a strong altseason. CoinMarketCap’s Altcoin Season Index rose to 44, Blockchain Center’s stands at 53, and CryptoRank’s hovers around 50. Meanwhile, altcoin market capitalization has increased over 50% since early July.
The momentum behind altcoins is bolstered by institutional factors such as digital asset treasury allocations and stablecoin narratives, with Ethereum receiving significant institutional attention. This dual dynamic partly explains the divergence between rising altcoin market cap and moderate altseason index readings. Duong concluded that these indicators suggest conditions may soon align for a more mature altcoin season as September approaches.
Joanna Liang, founding partner of venture capital firm Jsquare, emphasized the need for three critical factors for altseason: a supportive macroeconomic environment, declining Bitcoin dominance, and a fresh compelling narrative driving investor interest. She pointed out that prior cycles were spurred by clear catalysts like ICOs (2017–2018), Layer-1 blockchains (2018–2019), and DeFi/NFTs (2021–2022). Currently, the market seeks a strong new primary-market catalyst to ignite sustained altcoin momentum.