Market indicators suggest that the altcoin season may be approaching.

The crypto market is showing potential signs of an upcoming altcoin season. According to market observers, the combination of technical, psychological, and macroeconomic factors could lead to a strong rally for altcoins.

This prospect comes after a significant decline in the altcoin market, down about 37.6% from its peak in early December 2024. According to the latest data, the market capitalization is currently at 1 trillion dollars.

Is the altcoin season approaching?

Technically, Bitcoin's dominance index – a measure of Bitcoin's market share compared to the entire crypto market – appears to be at an important turning point.

A recent chart shared by analyst Mister Crypto on platform X shows that the dominance rate of Bitcoin has reached a resistance level after forming a rising wedge pattern. This pattern is often considered a bearish signal and typically leads to strong corrections.

Bitcoin Dominance Rate | Source: Mister Crypto"The Bitcoin dominance rate will collapse. The altcoin season is coming. We will all get rich this year!", he wrote.

In addition, the analyst CryptooELITES also confirmed these findings, noting that Bitcoin's dominance rate has peaked. Therefore, he predicts that there will be another decline.

Source: CryptooELITESTuy altcoin season index has now fallen to a low of 16. This index analyzes the performance of the top 50 altcoins against Bitcoin, showing that altcoins are currently underperforming.

! altcoin altcoin season index | Source: Blockchain CenterNotably, the current index level reflects the bottom of the altcoin that happened around August 2024. That period kicked off a sharp rally for altcoins, as the index peaks at 88 in December 2024.

Finally, from a macroeconomic perspective, President Donald Trump's decision to delay tariffs for 90 days has boosted market confidence. This delay is seen as a positive signal that could encourage capital flow into altcoins.

"90-day tax deferral = 90 days of altcoin season," a analyst commented.

Additionally, crypto analyst Crypto Rover pointed out that the (QE) quantitative easing policy could be a catalyst for the altcoin season. According to him, when central banks start injecting money into the economy ( through QE), altcoins could see significant price increases due to increased liquidity and optimism from investors.

"Once QE begins. The altcoin season will return strongly!" he declared.

However, in the latest report, Kaiko Research emphasizes that the traditional altcoin season may no longer be feasible. Instead, any rally may be selective, and only certain altcoins may register significant gains. The focus will be on assets with real-world applications, high liquidity, and potential to generate revenue.

"The altcoin season will become a thing of the past, requiring a more nuanced classification instead of simply grouping them under the name altcoin, as the correlation in terms of returns, growth factors, and liquidity among digital assets is becoming increasingly distinct over time," the report stated.

Kaiko Research notes that liquidity is increasingly concentrated on certain altcoins and Bitcoin, which may disrupt the flow of capital that typically flows into altcoins during growth market phases. Furthermore, as Bitcoin becomes more widely accepted as a reserve asset by institutions and governments, its position in the market continues to strengthen.

Overall, although there are signals indicating the possibility of a price surge for altcoins, the future of this market will clearly be associated with much more complex and differentiated movements than before.

Disclaimer*: This article is for informational purposes only and is not investment advice. Investors should do their own research before making decisions. We are not responsible for your investment decisions*

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Minh Anh

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