Key Highlights:
- Bitcoin dominance faces key resistance, signaling a possible shift toward altcoins.
- Altcoin trading and activity rise, suggesting early signs of market rotation.
- Analysts link altcoin season to Bitcoin highs and dominance reversal patterns.
A shift in cryptocurrency market dynamics has reignited discussions around the return of an altcoin season. Over the past week, investor sentiment reversed course following a short period of market pessimism.
Digital assets separated from equities on Monday, marking a notable decoupling. By Tuesday, a broader rally had fueled growing momentum in the altcoin market.
This recent optimism contrasts sharply with earlier concerns of a prolonged bear phase. Market data and technical analysis show that capital may shift away from Bitcoin and toward alternative digital assets.
BTC Dominance Chart Sends Reversal Signals
A chart shared by Crypto Elites revealed a recurring pattern on what appears to be the Bitcoin Dominance (BTC.D) chart. This chart compares Bitcoin’s market share to that of all other cryptocurrencies and displays a long-standing rising resistance trendline.
Each contact with this resistance has resulted in a rejection, followed by a significant decline. Resistance levels emerged around 4.00%, 6.00%, and most recently, 8.2%. Blue circles highlight these key points on the chart.
Following each rejection, the market experienced downturns that coincided with strong altcoin rallies. This recurring pattern has become a key reference for analysts monitoring a potential altcoin season.
According to the same chart, the rejections have historically triggered capital movement from Bitcoin to altcoins. Large gray arrows on the chart indicate steep declines in dominance. These drops coincided with times when alternative tokens significantly outperformed Bitcoin.
The note “Altcoin Season 50X” on the chart seems more like a reflection of market sentiment rather than an actual prediction. It likely conveys optimism about potential altcoin gains rather than a precise forecast.
Analyst Commentary Adds to Market Focus
In Crypto Rover’s analysis dated May 5, 2025, more assurance was given to anticipating a new altcoin phase. He said indications reveal that an altcoin season is on the horizon. His post came with newly obtained on-chain and exchange data that indicated increased altcoin usage.
As of May 5, BTC dominance was recorded at 54.3%. This dominance was even lower than what we had on the first of May at 55.1%, according to CoinMarketCap. This small change suggests that capital rotation is just beginning to manifest itself.
Supporting this movement, trading volumes also rose significantly. ETH/USDT trading on Binance reached $1.2 Billion by May 5, up from $850 Million on May 3.
Ethereum’s on-chain engagement showed increased user activity, with 1.15 million transactions recorded on May 4. This represents a 12% rise compared to the previous week.
Rotational Outlook Remains Central
While market interest is increasing, several analysts have pointed to historical BTC.D resistance levels as potential turning points. Arthur Hayes, BitMEX founder, suggested that the altcoin season may not commence until Bitcoin reaches new all-time highs.
He indicated that Bitcoin must break above its previous high of nearly $110,000. A further surge, likely nearing $200,000, could prompt capital rotation toward altcoins.
He emphasized that only specific tokens, especially those tied to profit-generating and yield-sharing projects, will likely benefit.
Meanwhile, an analyst known as Darky highlighted the 65% BTC.D level as a significant resistance threshold. He projected a sharp drop once that point is reached, suggesting the beginning of a market shift.
According to Darky, BTC dominance could fall to 39%, marking the entry point for altcoin rallies. Technical patterns such as a rising wedge on the BTC.D chart support this bearish reversal theory.
However, another view, which can be considered less radical, was represented by Milk Road Media. Analysts found that most altcoins are lagging behind Bitcoin in 90-day performance metrics. Only 17% of these coins managed to outperform the leading cryptocurrency.
They also said that Bitcoin’s domination rate needs to rise above 70 percent to rotate these other assets properly. The data-driven caution suggests that a full altcoin season has yet to emerge. However, some individual coins are starting to display isolated strength.
Elsewhere, the global CoinMarketCap Altcoin Season Index remains at 22. This means the market is still predominantly bearish toward the altcoins over BTC.
The index, which evaluates the top 100 digital assets, indicates that altcoin season is approaching. However, it remains in its early stages as broader market momentum builds.
Disclaimer
This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.
