Altcoin Season Could Be Coming, But It Hasn't Begun Yet: Here's Why

Bitcoin continues to hover above the $100,000 mark, and capital inflows from ETFs are surging. The biggest question in the crypto market right now is:

Bitcoin has been trading above $100,000 and capital is flowing heavily into crypto ETFs. But the biggest question on everyone’s minds is: When will altcoin season truly begin?

What Is Altcoin Season?

Altcoin season is a period when altcoins outperform Bitcoin.

According to Forbes, major cycles of altcoin season have occurred twice in the past, in 2017 and 2021. They were fueled by the booms of ICOs, DeFi, NFTs, and Layer-2 solutions.

During this phase, investment capital typically shifts from Bitcoin into altcoins, driving rapid price increases, particularly for large-cap and mid-cap altcoins – along with a surge in trading volume and growing FOMO sentiment.

Key Indicator: Bitcoin Dominance

One of the most important indicators for identifying the start of an altcoin season is the Bitcoin Dominance Index (BTC.D), which indicates the percentage of Bitcoin’s market capitalization compared to the entire crypto market.

According to data from TradingView, BTC.D peaked at 57.8% in late April, before slightly decreasing to around 55.2% by mid-May. As of now, TradingView reports that Bitcoin dominance stands at 63%, a significant increase from the 51% level recorded in November 2024.

According to well-known cycle analyst, Benjamin Cowen, if BTC.D drops below 52%, “that could be the confirmation signal that altcoin season is underway.”

However, Cowen also warned:

“Not every drop in BTC dominance results in an alt season. What matters is the inflow of new capital into altcoins – not just internal rotation.”

Capital Flows and Market Sentiment

Data from CoinShares shows that investment funds have poured over $14 billion into Bitcoin ETFs since the beginning of the year. However, inflows into ETH and other altcoins are significantly lower, accounting for only about 8% of the total capital — reflecting a defensive mindset among institutional investors, who continue to prioritize what they deem the safest asset in the crypto space.

Currently, the ETH/BTC pair is still locked in a long-term downtrend since late 2021, with the 0.065 level serving as a critical resistance. This threshold is viewed as the “confidence trigger”— a point at which the market may begin to believe that altcoins are ready to enter a strong upward cycle.

Without a decisive breakout above this level, supported by strong volume and confirmation from broader market flows, even a rising Bitcoin price may not be enough to ignite a true altcoin season. In essence, we need more than just bullish sentiment for BTC; we need Ethereum to spearhead the move.

As of May 14, ETH/BTC is hovering around 0.02 – still a long way from the threshold needed to confirm a trend reversal.

Quantitative Indicators and On-Chain Data

The Altcoin Season Index currently stands at 24, signaling “Bitcoin Season.” The Altcoin Month Index is at 57, and the Altcoin Year Index is at 27 – all below the 75-point threshold used to identify an altcoin season.

These metrics are based on the performance of the top 50 coins (excluding stablecoins and asset-backed tokens) compared to Bitcoin over the past 90 days.

Followed by Dune Analytics, the number of new active wallets on chains like Solana and Base is rising again. Meanwhile, Ethereum gas fees remain below 30 gwei, indicating that the market isn’t overheated yet but also suggests ample room for future growth.

There is a sharp divergence in forecasts for the 2025 altcoin season:

From a bullish perspective, altcoin season may have already begun, as altcoin market capitalization reached $1.89 trillion, surpassing its November 2021 peak of $1.79 trillion. Additionally, the Altcoin Season Index exceeded 75% on December 2, 2024, and stayed above that level for a full week, according to Blockchain Center.

However, more cautious views – like that of Benjamin Cowen, suggest that the altcoin season could be delayed, as BTC dominance remains high (60%) and monetary policy uncertainty lingers. Cowen warns that a lack of fresh capital and unsustainable performance could cause the market to stall.

From a selective outlook, Ki Young Ju, CEO of CryptoQuant, believes that only altcoins with strong fundamentals, real revenue, and ETF potential are likely to outperform in this cycle. “The era when everything goes up is over,” he said, implying a more mature and selective market environment.

Key Drivers Behind Altcoin Season

Institutional capital remains a dominant force in crypto markets. Spot Bitcoin