The crypto market may be entering a long-anticipated phase: altcoin season. With Bitcoin’s (BTC) market dominance on the decline and stablecoin leader Tether (USDT) losing its grip, capital is increasingly flowing into altcoins—and the numbers tell a compelling story. Recent triple-digit returns from select altcoins and memecoins, combined with key technical breakouts, suggest that broader market momentum is shifting.
This movement isn’t just speculative noise. It’s supported by structural shifts in market dynamics, including declining dominance metrics, rising investor confidence, and strong technical signals across major altcoin indices. As we navigate through May 2025, these trends point toward a potential altseason—one defined by outsized gains beyond BTC and ETH.
Bitcoin Dominance Drops Amid Signs of Altcoin Strength
Bitcoin has long been the anchor of the cryptocurrency market, often absorbing the majority of trading volume and investor attention. However, its dominance—measured by BTC.D, which tracks BTC’s share of total crypto market cap—is showing signs of exhaustion.
Over the past six days, Bitcoin dominance has dropped 4%, marking the steepest decline since November 2024. This kind of sustained drop typically signals that capital is rotating out of Bitcoin and into alternative cryptocurrencies.
👉 Discover how market cycles are shifting in favor of high-potential digital assets.
When Bitcoin dominance falls, it often creates space for altcoins to outperform. Historically, such periods have led to explosive rallies in Ethereum (ETH), Solana (SOL), Ripple (XRP), and emerging ecosystems. The current environment mirrors past inflection points where altseasons began.
Michael Van Poppe, founder of MN Capital, highlighted a critical technical development: a bearish divergence on the weekly timeframe.
"We’re seeing a strong bearish divergence on the weekly chart—Bitcoin dominance has likely peaked. The altcoin bear market is coming to an end."
This observation aligns with broader market behavior. A topping BTC.D suggests reduced risk aversion and growing appetite for higher-risk, higher-reward assets. In other words, investors are no longer parking funds solely in Bitcoin; they’re seeking alpha elsewhere.
TOTAL2 Breaks Key Resistance: Altcoins Take Center Stage
One of the most telling indicators of an impending altseason is the performance of the TOTAL2 index, which represents the combined market capitalization of all cryptocurrencies excluding Bitcoin.
The TOTAL2 chart has recently broken above a descending trendline that had been in place since January 2025. More importantly, this breakout came with a bullish structure confirmation (BOS) on the daily timeframe—characterized by higher lows and increasing momentum.
If the index can decisively surpass the $1.25 trillion resistance level, it could confirm the start of a sustained upward trend. Such a move would reflect not only increased investor interest but also real capital inflows into non-Bitcoin assets.
This structural shift underscores a critical narrative: the market is broadening. Instead of concentration in BTC or a few large caps, value creation is spreading across diverse sectors—DeFi, AI-driven protocols, Layer 1 blockchains, and even memecoins.
USDT Dominance Slides Toward Multi-Year Lows
Another powerful signal supporting the altseason thesis is the decline in Tether (USDT) dominance.
On May 13, USDT’s share of the stablecoin market dropped to 4.59%, the lowest since early February. The weekly chart reveals a descending triangle pattern, suggesting further downside pressure. Analysts project potential support around 3.90%, a level not seen since 2021—coinciding with the last major altcoin boom.
A falling USDT dominance indicates that traders are moving out of stablecoins and back into volatile crypto assets. Rather than holding cash-like instruments during uncertainty, they’re deploying capital into risk-on plays.
This trend is already visible in price action:
- Ethereum (ETH): +44.3% over seven days
- Solana (SOL): +22%
- Ripple (XRP): +20.6%
- Bitcoin (BTC): +10%
The outperformance of these major altcoins relative to BTC reinforces the idea that capital is rotating beyond the top-tier asset.
👉 See how top-performing digital assets are gaining momentum in real time.
Altcoins Still in Early Stages of Recovery
Despite recent rallies, many altcoins remain far from their all-time highs. According to analyst ZERO IKA, most leading projects are still 70% to 90% below peak valuations.
This gap suggests the recovery is still in its early stages—offering significant upside potential for informed investors. Historically, the most aggressive gains occur after initial breakouts, once sentiment turns decisively bullish and FOMO begins to build.
Moreover, several altcoins have now cleared key structural resistance levels on higher timeframes—breaking above February and March highs. These technical milestones often precede extended uptrends, especially when accompanied by rising volume and improving on-chain fundamentals.
What Drives an Altcoin Season?
Several interconnected factors typically fuel an altseason:
- BTC Maturity: After a strong Bitcoin rally or halving event, traders lock in profits and seek leverage in smaller-cap coins.
- Increased Liquidity: New inflows from institutions or retail drive speculative activity.
- Innovation Cycles: Emerging narratives like DeFi, NFTs, AI-blockchain integration, or zk-tech spark developer and investor interest.
- Reduced Risk Aversion: Falling stablecoin dominance reflects confidence in holding volatile assets.
- Market Breadth Expansion: More coins participating in rallies indicates healthy ecosystem growth.
All five conditions appear to be aligning in mid-2025.
Frequently Asked Questions (FAQ)
What defines an altcoin season?
An altcoin season occurs when a large number of alternative cryptocurrencies consistently outperform Bitcoin over a sustained period. It's typically marked by rising market caps, increased trading volumes, and broad-based price appreciation across non-BTC assets.
How do you know when an altseason is starting?
Key indicators include:
- Declining Bitcoin dominance (BTC.D)
- Falling stablecoin dominance (especially USDT)
- Breakouts in the TOTAL2 index
- Higher lows and increasing momentum in major altcoins
- Growing social media and search interest in specific projects
Can altseason happen without Bitcoin rising?
While rare, it’s possible. However, most altseasons follow strong Bitcoin performance. BTC often acts as a gateway—once it stabilizes or shows strength, capital flows downstream into riskier assets.
Are memecoins part of altseason?
Yes. Memecoins like Dogecoin (DOGE) and Shiba Inu (SHIB), along with newer community-driven tokens, often surge during altseasons due to high speculation and social momentum—even if they lack fundamental utility.
Is this altseason sustainable?
Sustainability depends on continued innovation, adoption, and macro liquidity. If developer activity and real-world use cases grow alongside price increases, the rally can extend. Otherwise, it may turn into a short-term speculative wave.
Should I sell Bitcoin to buy altcoins?
That depends on your risk tolerance and investment strategy. While altcoins offer higher growth potential, they also come with greater volatility. Diversification—rather than full rotation—may be a balanced approach for many investors.
Final Outlook: Altseason Gateways Are Opening
With Bitcoin dominance weakening, USDT dominance trending downward, and technical structures breaking to the upside, the foundation for a full-blown altseason appears solid.
The combination of declining dominance metrics and rising altcoin valuations suggests that capital rotation is underway. Investors are shifting from preservation to participation.
Even though many altcoins remain deeply undervalued compared to previous peaks, early movers are already benefiting from triple-digit returns. As confidence grows and more participants enter the market, momentum could accelerate rapidly.
👉 Stay ahead of the next wave of digital asset growth—explore emerging opportunities today.
While no market phase lasts forever, timing entry during the early stages of an altseason has historically offered some of the best risk-reward profiles in crypto investing.
For now, the data speaks clearly: the door to altseason is open—and those watching closely may want to step through.