- Altcoin season follows Bitcoin’s dominance – Capital shifts when BTC.D declines
- Several factors could pose a significant threat to altcoin cycles
Bitcoin dominance [BTC.D] is a key metric to track altcoin seasons. When BTC.D drops, it usually means investors are moving into altcoins during periods of market volatility.
However, even with macroeconomic concerns like the upcoming FOMC meeting and Trump’s 2 April ‘reciprocal’ tariffs, Bitcoin’s dominance remains strong. At the time of writing, it had a reading of 61.6%, still a bit below its February peak of 64.3%.
Interestingly, a closer look at the weekly top gainers revealed that 4 out of the 5 were mid or low-cap altcoins. This shift suggests investors have been moving away from large-cap coins in favor of cheaper, higher-risk options.
Source: CoinMarketCap
Bitcoin’s resilience in the face of altcoin overload
Historically, Bitcoin dominance has served as an important gauge for altcoin seasons. When BTC.D rises, it typically signals that investors are moving their funds into Bitcoin for safety. However, this time, things feel different. For starters, the risk with Bitcoin is higher than usual. Q1 didn’t end as expected – Bitcoin is still stuck below $100k, disappointing many.
Additionally, no rate cuts are expected until at least the end of Q2, keeping the market in a wait-and-see mode. Despite this, the altcoin season is nowhere to be seen.
Even with Bitcoin holding steady, the altcoin season index sat at 29 at press time, meaning 58% of altcoins are outperforming BTC. Especially the low-to-mid cap coins.
However, this was still far below the 75% threshold typically needed to kickstart a true altcoin season.
Source: Blockchaincenter.net
A key factor behind this cycle is the rise of Bitcoin ETFs. Just days before Bitcoin hit its all-time high of $109k in January, Bitcoin ETFs saw $1.078 billion in inflows.
Since then, millions have poured into these ETFs, keeping capital locked in BTC. This shift has delayed the typical altcoin season, especially as liquidity remains restricted.
The end of the altcoin season?
As of 18 March, there were over 12.88 million digital assets listed on CoinMarketCap, up from 11 million in February. This surge, mainly from memecoins and low-cap tokens, is spreading investor attention thin.
While Bitcoin dominance holds strong and delays altcoin season, investors are turning to high-risk alternatives. Many tokens are now stuck with market caps between $10,000 and $100,000, locking up capital in short-term assets.
This is putting pressure on top high-cap coins. For instance – The ETH/BTC pair, once strong, has now fallen to a five-year low.
Source: TradingView (ETH/BTC)
In conclusion, Bitcoin’s dominance remains strong, with new tokens and the rise of ETFs reshaping the market. The usual flow of capital from Bitcoin to altcoins seems to be fading too, leaving the cryptocurrency firmly in control.