When Will Altcoin Season Start? Key Signs to Watch

Something feels wrong in this crypto market cycle. Alt season When Altcoins Skyrocket Outperforming Bitcoin hasn't happened as expected. Bitcoin has already reached new all time highs multiple times. Yet many top altcoins are still lagging behind their previous cycle peaks.

The inevitable outcome for altcoins is that they will bleed down here.

Institutional allocators want to see fundamentals. They don't want to buy nonsensical tokens.

So is alt season just delayed or could it be that it won't come at all? And if it does, how will it differ from previous cycles and which altcoins are positioned to benefit the most? In this video we'll break down these questions. As always, this is not financial advice, just educational content. Make sure to do your own research before investing in altcoins. Altseason stands for altcoin season. It is the face of the bull market when altcoins start massively outperforming btc. And this doesn't happen randomly. It follows a predictable cycle based on how money moves in the crypto market. It all starts with bitcoin. During a bull run, Bitcoin is the first cryptocurrency to pump as investors rush in driving its price to new highs. But once bitcoin slows down or consolidates, traders start looking for bigger opportunities. That's when Ethereum and other large cap altcoins like Solana and Binance Coin begin their rally. As confidence grows, money starts flowing into riskier and smaller altcoins. This is where we see the craziest gains, sometimes thousands of percent in just a few weeks. A perfect example is early 2021. Back then Bitcoin crossed $60,000 and then altcoins took over. Ethereum skyrocketed past $4,000, Binance coins surged and Dogecoin went from fractions of a cent to over 70 cents. Lets talk about where we are now and why this cycle feels different. Last March bitcoin broke its all time high. Since then it set multiple records. But unlike previous cycles, we haven't seen liquidity flowing out of bitcoin into altcoins. The usual trigger for an ALTS season. One key metric to watch is Bitcoin dominance, the percentage of the total cryptocurrency market cap that belongs to Bitcoin. It has been steadily increasing during several months. Meanwhile, many top altcoins have underperformed Bitcoin and still haven't reached their previous all time highs. The most notable example is Ethereum. Since 2022 ETH has been in a downtrend against Bitcoin. If you want to know more about the reasons behind ETH's underperformance, check out our dedicated video in the Description Overall, the total market capitalization of altcoins is still far below the peak it reached in November 2021. So why is this cycle so much different? One major difference this time is the rise of institutional investors and the introductions of the Bitcoin ETFs a year ago. Most of the new capital in this cycle has been flowing into Bitcoin ETFs and to a lesser extent, Ethereum ETFs. And here's the problem. This capital stays locked in this financial product. It doesn't flow into altcoins like it did in previous cycles.

The current cycle, what we've experienced over the past 12 months, was mostly institutional driven. Once the institutional investor enters the Bitcoin or Ethereum etf, he's not going to switch for altcoins. First, it's not possible, but even if he could, he wouldn't do that.

According to some analysts, Bitcoin is now in a league of its own and is becoming less correlated with the rest of the crypto market. And because capital inside ETFs doesn't rotate freely, we are not seeing the usual money flow into altcoins.

Institutional capital might funnel one way and then can't or has no desire to funnel further or funnel in a different direction. So Bitcoin does have a structural advantage where a like line of sight from tradfi markets has been established.

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There is also another factor that comes into play, the explosion of meme coins tokens with no fundamental value that we saw over the course of 2024. Analysts say that meme coins created a liquidity problem in the market, sucking out liquidity from altcoins. Platforms like PumpFun allow anyone to create new tokens instantly, leading to a flood of new coins. As a comparison, during the 20172018 bull market there were about 3,000 altcoins, while at this pace by the end of 2025 we could have over 100 million tokens that's one of the reasons Solana was one of the few altcoins to perform well until recently. The popularity of meme coins helped drive significant trading activity on the platform, boosting its performance. However, with the fading meme coin craze, Solana's price has also taken a hit. That is why many believe that altseason already happened. But it was concentrated in the meme coin market and on Solana, where most of the trading took place. Essentially, meme coins sucked liquidity out of other assets, shifting attention toward the wild west of crypto. But that era was short lived. The peak of the meme coin craze came in January when TrumpCoin launched. After several meme coin related scandals, market sentiment around this sector has started to fade. Finally, a third reason why alt season has not materialized may have to do with US Monetary policy.

Last cycle, the altcoin market didn't truly bottom against Bitcoin until the Fed ended quantitative tightening. This cycle, you know, it feels so much different than last cycle. And the reason is because quantitative tightening has been going on a lot longer. They're still reducing the size of their balance sheet. The Fed began cutting interest rates in 2024, but they also never actually pivoted to quantitative easing.

So now we are left wondering, will we see a proper alt season in 2025? The truth is, nobody knows for sure. At the moment, market sentiment is low. Several factors are putting pressure on the crypto market, including the impact of Trump's announced tariffs. Many believe fresh catalysts are needed for the next leg up. Some say this is a great opportunity to buy the bottom, but of course this is not financial advice. So the big question should you focus on bitcoin or is now the time to buy altcoins? According to Cowen, the downtrend for altcoins will continue until U.S. monetary policies change.

If history is any indication, then the inevitable outcome for altcoins is that they will bleed down here to the range lows against bitcoin. And that's essentially when the altcoin market cap is equivalent to 25% of Bitcoin's market cap.

Well, according to some analysts, we may not see a full fledged alt season this cycle. The market is oversaturated with tokens and there is just not enough liquidity. In such an environment, institutional money will continue flowing into Bitcoin and to a lesser extent into Ethereum through ETFs, but that won't necessarily translate into big gains for altcoins. According to other analysts, though, altcoin season will still happen, but it will look very different because the structure of the market has dramatically changed. Instead of the entire altcoin market pumping like in previous cycles, only a select few coins are expected to outperform. Institutional capital now dominates, and this shift has led to a more selective investment approach.

As crypto is maturing, you're starting to see meaningful dispersion between assets that make sense and assets that do not make sense. You cannot bucket every single token but bitcoin into a bucket and think that it's going to trade in some sort of consistent or logical manner with one another.

So how do you know which altcoins will outperform? According to CryptoQuant CEO Ki Yong Yu, the best performing altcoins will likely have three main characteristics. The first one is potential ETF approval. In the US these cryptocurrencies will have a channel for institutional capital to flow in. According to Polymarket, Solana, Litecoin and XRP are a few cryptos that have a fair chance of getting an ETF approved this year. However, that may not be enough. Ethereum had its ETF approved several months ago and that's the still been underperforming. A second important factor is a sustainable attention driver. This means not just a celebrity promoting a coin, but a strong, long lasting narrative. The third factor, and perhaps the most important, is revenue generating project. So tokens that are not purely speculative or based on narratives, but have a sustainable business model producing cash flows.

For example, Tensor has outperformed Bitcoin by force 41% since the Libra token was launched and markets started tumbling. So like, why is that? It's because Tensor has an awesome product. Over that same period, Geodnet is outperforming Bitcoin by 10%. Why is Geodnet outperforming? Because it has a fantastic business, it generates ARR and its revenues are fundamentally untethered to cyclical crypto markets.

Of course, retail traders are likely to continue taking a completely different approach. For some, altcoin investing is all about hype and momentum.

If you're gonna trade altcoins, you should be focused 100% on TikTok, on Instagram and whatever is trending out there. Because if there's an influencer with 2 million followers saying that Hedera or Polkadot or Shiba or Uniswap is the next big thing because of X and yz, that coin is going to pump.

However, according to most analysts, the overall trend is moving in a different direction. The growing institutionalization of crypto means that the token that will prevail will be the ones that can attract institutional interest.

Retail capital has been dominant in crypto, and I think it will move prices for a long time. But the incremental unit of capital that's coming into crypto markets, I think it's an institutional allocator. And institutional allocators want to see fundamentals. They don't want to buy nonsensical tokens.

So what do you think about this analysis guys? Will we see an alt season in this cycle? And if so, which altcoins are you betting on? Drop a comment below. Also, if you enjoyed the video, don't forget to like subscribe and hit the notification bell for more insights on the crypto markets.

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