As Bitcoin's market share declines, the altcoin season may be approaching, and Ethereum is leading a strong upward trend towards $4,000.
While Bitcoin maintains stability below $120,000, altcoins are showing an upward trend. This rise in altcoins is gradually eroding Bitcoin's cryptocurrency market share.
Altcoin Season Imminent
The altcoin season index is currently approaching a critical altcoin season threshold. This index tracks the performance of altcoins against Bitcoin.
This indicates whether the cryptocurrency market has entered a stage where altcoins outperform BTC. At the time of writing, this index is at the midpoint, and altcoins need to show stronger performance to cross the threshold and start the altcoin season.
Capital inflows are favoring altcoins over Bitcoin, further confirming the positive sentiment. The altcoin season is confirmed when 75% of the top 50 cryptocurrencies outperform Bitcoin for 90 days. Stablecoins and asset-backed tokens are excluded.
Currently, only 50% of these altcoins have exceeded Bitcoin's returns, indicating that more growth is needed before a full altcoin season begins.
However, Ethereum's 27% surge this week has pushed many other tokens to their highest levels in months. If more altcoins follow Ethereum's lead and outperform Bitcoin, they could reach the threshold needed for an altcoin season by early next month.
Bitcoin Market Dominance Shaken
Bitcoin's market share has sharply declined over the past 5 days, dropping from 64.5% to 60.9%, a 5.6% decrease. This decline marks a four-and-a-half-month low, reflecting a market preference for altcoins.
The decline in market share is often the first signal of an altcoin season.
Ethereum's upward trend has significantly contributed to this decline, while BTC's price has not significantly changed from $118,301. Despite the loss in market share, Bitcoin's price has not fallen, indicating a healthy market transition rather than a sell-off. The asset is consolidating below $120,000.
Caution is advised. If altcoin investors begin to realize profits from recent gains, selling pressure could halt the upward trend. Many tokens are at their highest levels in months, and a sharp sell-off could reverse gains.
This could delay the start of a true altcoin season, pushing it to the third quarter of 2025.
