The cryptocurrency market is signaling an upcoming altcoin season as historical cycles and technical indicators align. In 2017 and 2021, altcoins surged after Bitcoin [BTC] peaked and entered an accumulation phase. Currently, many altcoins are reclaiming key resistance levels, while Bitcoin dominance is hitting a structural barrier, increasing the likelihood of capital rotation.
Bitcoin Dominance (BTC.D) has reached 62.40%—the highest level in four years. However, the RSI indicator is approaching the overbought zone, suggesting a potential correction. If Bitcoin’s dominance weakens, capital may flow into altcoins, similar to what happened in 2021 when BTC.D dropped to 40% by mid-Q2, pushing the altcoin market cap to a record $1.5 trillion. At that time, a volatile economic environment, rising inflation, and expansionary fiscal policies contributed to the rally—similar to current conditions.
The altcoin market cap remains below $1 trillion, with RSI signaling a bottoming-out—an encouraging sign for a potential recovery. Altcoins are hovering around a crucial $900 billion support zone, poised for a breakout. However, for an altcoin season to materialize, Bitcoin’s dominance must decline. Currently, BTC.D is at a three-year high, while many altcoins are still experiencing double-digit losses.
A key question arises: Is this the right time to manage risk and diversify into lower-cost alternatives? BTC.D serves as a critical indicator of capital flow trends. However, this cycle, Ethereum [ETH] and Solana [SOL] have underperformed relative to BTC, even breaking multi-year support levels. Over the past week, ETH and SOL have lost over 13%, while Bitcoin has only declined by 6%, with mid-cap altcoins suffering even greater losses.
Despite this, some analysts remain optimistic, predicting the largest altcoin season ever based on macroeconomic factors and Bitcoin accumulation. Currently, the market is considering three main scenarios for Bitcoin:
- A gradual decline to the $50,000–$60,000 range.
- Fluctuating between $70,000–$90,000 with significant volatility.
- A breakout above $90,000—an unlikely scenario unless a major catalyst emerges.
The most probable scenario is Bitcoin moving sideways, allowing altcoins to consolidate and rally. With many altcoins down 80–90% from their previous highs, the recovery period may be shorter than expected—provided the market conditions trigger capital rotation.
If this unfolds, BTC.D could collapse similarly to 2021, when both technical and macroeconomic factors aligned. This could be the opportunity that altcoin investors have been waiting for.
