When will the altcoin season arrive? Four key signals to grasp Altseason

Altseason(Altseason) sounds mysterious, but its essence is simple—it’s a window when mainstream capital flows from Bitcoin to other cryptocurrencies. Recent market changes tell us that the next altseason might be just around the corner.

What is Altseason, and why should you pay attention to it?

Altseason refers to a period of collective explosion in alternative tokens. Specifically, when Bitcoin’s dominance drops below 50%, it usually signals that market capital is starting to flow into Ethereum, Solana, and other mainstream altcoins, as well as smaller, niche projects.

Unlike Bitcoin season, which reflects market risk aversion—investors flocking to Bitcoin as “digital gold”—Altseason is the opposite. It represents market greed and a pursuit of innovation.

What does historical data tell us?

Late 2017 - Early 2018: ICO Boom
Bitcoin dominance fell from 87% to 32%, and altcoin market cap exploded. At that time, some unknown projects also got caught up in the frenzy, eventually collapsing under regulatory crackdowns.

Early 2021: DeFi and NFT Boom
Bitcoin dominance dropped from 70% to 38%, and altcoin market share surged to 62%. That year saw the rise of Uniswap, the explosion of OpenSea, and hundreds of times gains in various altcoins. The total market cap once broke through $3 trillion.

End of 2023 to Present: Signals of Institutional Entry
Although this round of altseason has different characteristics, the driving forces are more solid—supported by institutional investors and stablecoin liquidity. Currently, we see multiple sectors heating up simultaneously, including AI tokens, GameFi, and DePIN.

Four core indicators to judge Altseason

Indicator 1: Bitcoin Dominance
This is the most straightforward signal. When Bitcoin dominance continues to decline, especially below 50% or even 40%, it indicates that market capital is spreading out. As of December 2024, this number is trending downward, suggesting the market may be in a preparatory phase.

Indicator 2: ETH/BTC Ratio
Ethereum’s performance relative to Bitcoin is a market indicator for altcoins. When this ratio rises, it usually means Ethereum is outperforming Bitcoin, often signaling the start of a broader altseason.

Indicator 3: Stablecoin Liquidity
The driving force behind modern Altseason has shifted. It’s no longer just capital rotating from Bitcoin to altcoins; inflows of stablecoins(USDT, USDC, etc.) create the “fuel” for altcoin trading. When trading volume on stablecoin pairs surges, it often signals the beginning of a new altcoin rally.

Indicator 4: Market Sentiment Index
Pay attention to social media buzz and specific coin topics. When discussions around AI tokens, GameFi, Meme coins, etc., suddenly spike and gains exceed 40%, it’s often a sign that altseason has already started.

Current market status: what stage are we in?

As of December 2024, several key changes have occurred in the crypto market:

• Increased institutional acceptance: Over 70 spot Bitcoin ETFs approved, large inflows of institutional funds
• Improved policy outlook: The new government’s pro-crypto stance has strengthened market confidence
• Market cap hits new highs: Total crypto market cap reached $3.2 trillion, surpassing 2021 records
• Bitcoin approaching $100,000: Although not yet突破, the psychological threshold is nearing, attracting incremental capital

These factors together indicate that early signals of Altseason are already present.

Four stages of Altseason: understanding capital flow

Stage 1: Bitcoin Accumulation
Funds first flow into Bitcoin, pushing its price higher. At this stage, Bitcoin’s dominance remains high(above 60%), and altcoins are relatively quiet.

Stage 2: Ethereum Initiation
When Bitcoin’s gains slow down, capital begins exploring Ethereum. This is a testing phase, with investors experimenting with DeFi, Layer2, and other ecosystems.

Stage 3: Mainstream Altcoin Rally
Projects like Solana, Cardano, Polygon start outperforming the market. This is the main active period for institutional investors.

Stage 4: Small-Cap Explosion
Finally, the market becomes wildly euphoric—small-cap projects, new tokens, even Meme coins start to surge. This is the riskiest but most rewarding phase.

Is now a good time to buy? Some practical tips

Do your homework before jumping in
Don’t get carried away by hype. Before buying any altcoin, spend time researching its fundamentals—team background, technical solutions, real-world utility. Many projects in altseason end up zeroed out.

Diversify to reduce risk
Don’t put all your funds into one project. Build a diversified altcoin portfolio: hold some mainstream coins(like ETH, SOL) as core assets, and allocate some funds to explore small and mid-cap projects.

Set stop-loss and take-profit levels
Altcoins can be highly volatile—making you rich in a month or wiping you out. Set reasonable stop-loss levels(usually 10-15% below your buy-in), and also define take-profit targets. Don’t be greedy.

Watch for risk signals

• Excessive leverage: When the market has many borrowed positions, a sudden dip can trigger chain liquidations
• Project rug pulls: “Rug pulls”(rug pull) are common in altseason—be wary of projects with overhyped promotion but unclear fundamentals
• Regulatory storms: Negative regulatory news can destroy market confidence instantly

The invisible impact of policy changes on Altseason

History shows that regulatory stance directly influences the length and strength of Altseason.

The 2018 ICO ban abruptly ended that year’s altseason at its peak. Conversely, recent approval of Bitcoin and Ethereum spot ETFs by the US SEC is a form of recognition for the entire crypto industry, often boosting long-term bullish sentiment.

If the new government adopts a supportive attitude toward crypto, it will not only boost confidence in existing projects but also attract more institutional funds. Under such an environment, altseason could last longer and be more stable than past cycles.

Final words

Altseason isn’t an event that can be precisely predicted, but it’s also not completely hidden. By monitoring Bitcoin dominance, stablecoin inflows, Ethereum performance, and market sentiment, you can roughly judge whether you’re in this window.

Most importantly—don’t chase in at the last moment. That’s often the riskiest time. Wise investors start positioning in Stage 2 or 3, rather than waiting for small caps to explode and dreaming of overnight riches.

Altseason is indeed an opportunity, but only if you’re prepared.