The crypto market may be entering a highly anticipated phase: altcoin season. With Bitcoin (BTC) and Tether (USDT) dominance on the decline, and double- and triple-digit gains emerging across the altcoin landscape, momentum is shifting. Investors and analysts alike are watching closely as key technical indicators suggest a broader rotation of capital from Bitcoin into alternative cryptocurrencies.
This shift isn’t just speculative—it’s supported by measurable on-chain and market structure changes. From breaking long-term downtrend lines to declining dominance metrics, the foundation for a sustained altcoin rally appears to be forming in mid-2025.
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Signs of an Emerging Altcoin Season
An "altcoin season" refers to a period when alternative cryptocurrencies significantly outperform Bitcoin in terms of price appreciation and trading volume. While Bitcoin often leads the initial phase of a bull run, altcoins tend to surge later as investor confidence grows and capital spreads across the ecosystem.
Currently, several macro-level indicators point toward the beginning of such a phase:
- Declining Bitcoin dominance (BTC.D)
- Breakout in TOTAL2 index (non-BTC market cap)
- Falling USDT dominance signaling capital deployment
- Strong price performance in major altcoins like ETH, SOL, and XRP
These signals align with historical patterns seen during previous altcoin rallies, including those in 2017 and 2021.
The TOTAL2 Index Breaks Key Resistance
One of the most telling signs is the recent breakout in the TOTAL2 index, which tracks the combined market capitalization of all cryptocurrencies excluding Bitcoin. After being confined within a descending trendline since January 2025, the index has now broken above this long-standing resistance.
This breakout was accompanied by a Bullish Structure Break (BOS) on the daily chart—a concept widely used in smart money analysis that confirms a shift from bearish to bullish momentum. Additionally, the formation of higher lows reinforces the idea of strengthening buyer interest.
If the index sustains above the $1.25 trillion resistance level, it could pave the way for a full-fledged upward trend characterized by higher highs and higher lows—classic hallmarks of a bull market phase.
Such a move would confirm that capital is rotating out of Bitcoin and into diversified crypto assets, fueling broader market participation.
Bitcoin Dominance Shows Top Formation
Bitcoin’s market dominance, tracked via the BTC.D metric, has dropped 4% over six days—its steepest decline since November 2024. This sharp fall suggests growing investor appetite for riskier but potentially high-reward altcoins.
Michael Van Poppe, founder of MN Capital, highlighted a critical development: a bearish divergence on the weekly timeframe. Despite Bitcoin’s price holding relatively steady, its dominance is weakening—a classic sign that the leader is losing momentum.
"We’re seeing a strong bearish divergence on the weekly chart. This indicates BTC dominance may have already peaked. The altcoin bear market is likely ending."
This kind of structural shift often precedes major altseason rallies. When Bitcoin dominance plateaus or declines while altcoin prices rise, it reflects a maturing cycle where investors seek amplified returns beyond the flagship cryptocurrency.
USDT Dominance Drops—Capital Is Deploying
Another powerful signal comes from Tether (USDT) dominance, which fell to 4.59% on May 13, the lowest level since early February. The weekly chart reveals a descending triangle pattern, a bearish formation that typically resolves with a downside breakout.
Analysts project potential support around 3.90%, with a breakdown possibly pushing USDT dominance to levels last seen in 2021—coinciding with the peak of the last altseason.
👉 See how declining stablecoin dominance reflects rising market confidence.
Why does this matter?
When investors hold large amounts of stablecoins like USDT, it usually indicates caution—capital is parked, awaiting deployment. But when stablecoin dominance drops, it means people are exchanging stable value for volatile assets, i.e., buying into crypto.
In the past seven days:
- Ethereum (ETH): +44.3%
- Solana (SOL): +22%
- XRP: +20.6%
- Bitcoin (BTC): +10%
This performance gap highlights where momentum is building. Altcoins are not only outperforming—they’re accelerating.
Altcoins Still Undervalued Relative to All-Time Highs
Despite recent gains, many top altcoins remain far below their peak valuations. According to crypto analyst ZERO IKA, numerous projects have just broken through structural resistance levels formed in February and March 2025—key confirmation that upward momentum is gaining traction.
Yet even after these breakouts:
- Most layer-1 tokens are still 70–90% below their all-time highs
- Investor sentiment remains cautious compared to previous euphoric cycles
- On-chain activity shows increasing accumulation, not speculative mania
This combination suggests the current phase is still early-stage, not mature or overheated. There may be substantial room for growth before reaching parabolic phases.
As capital continues to flow from stablecoins into Bitcoin and then into altcoins—a typical three-stage bull cycle—we could be witnessing only the second act of a larger rally.
Frequently Asked Questions (FAQ)
Q: What defines an "altcoin season"?
A: An altcoin season occurs when a broad range of cryptocurrencies outperform Bitcoin over a sustained period. It's typically marked by rising altcoin market caps, increased trading volume, and declining Bitcoin dominance.
Q: How do you know when an altseason is starting?
A: Key indicators include a sustained drop in BTC.D, breakout patterns in the TOTAL2 index, declining stablecoin dominance (especially USDT), and strong price momentum across major altcoins like ETH, BNB, and SOL.
Q: Is this altseason confirmed yet?
A: Not fully—but early signals are strong. A confirmed altseason usually requires multiple weeks of consistent outperformance and structural breakouts across the market. Current data suggests we’re at the tipping point.
Q: Why does USDT dominance matter?
A: Falling USDT dominance means investors are moving money out of stablecoins and into volatile assets like crypto. It reflects growing risk appetite and often precedes major price rallies.
Q: Can altcoins keep rising if Bitcoin stalls?
A: Yes. While Bitcoin often sets the overall market tone, altcoins can decouple during strong momentum phases—especially if there's new innovation (e.g., DeFi, NFTs, AI tokens) driving demand independently.
Q: Are we late to the altseason?
A: Probably not. With most altcoins still significantly below all-time highs and sentiment not yet euphoric, many analysts believe this cycle is still in its early to mid-stage.
Conclusion: The Door Is Open
With Bitcoin dominance weakening, USDT dominance declining, and technical structures breaking bullish across major indices, the conditions for an altcoin season are aligning in 2025.
The breakout of the TOTAL2 index above its long-term downtrend adds credibility to this narrative. Meanwhile, strong performances from Ethereum, Solana, and others show real capital movement—not just speculation.
While nothing is guaranteed in crypto markets, the current setup mirrors patterns seen before historic rallies. For investors, this could represent a strategic window to explore high-potential altcoins before broader market awareness drives prices higher.
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