When will altcoins have their moment? Understanding the keys to the altcoin season

An altcoin season is much more than just a passing trend — it’s a reordering of the crypto market where smaller coins outperform Bitcoin in returns. This phenomenon occurs when investors shift their strategies and capital flows out of Bitcoin into riskier alternatives. But what actually determines when this phase begins, and how can you recognize the signs?

The Pattern of Signals Behind Market Phase Transitions

The most reliable indicator is the decrease in Bitcoin’s market share. Historically, Bitcoin attracts capital when the market stabilizes, and then the focus shifts to altcoins once the foundation is solidified. This rotation of capital typically triggers a surge in trading activity and volume for altcoins — a clear signal that both professional and retail investors are entering en masse.

Macroeconomic forces also play a crucial role. Rate cuts make risk capital cheaper and more attractive for investors seeking higher returns. During periods of increased global liquidity, the willingness to invest in more volatile assets grows, which can notably benefit altcoins.

Lessons from Two Explosive Cycles

The 2017-2018 altcoin season dramatically showed how quickly things can change. In just ten months, Bitcoin’s dominance dropped from 96% to 36%, while the combined market capitalization of altcoins increased by $470 billion. Investors who recognized this trend early saw enormous gains.

The second major wave occurred four years later. In 2020-2021, the TOTAL2 index (all altcoins combined) peaked at $1.5 trillion — a 650% growth over just 309 days. This demonstrates that altcoin seasons are not one-time events but recurring cycles that follow certain patterns.

Why Is Now Interesting?

The current market environment sends mixed signals. On the positive side: global liquidity is recovering due to a weakening US dollar position and improved financial conditions. Regulations in the US are becoming increasingly favorable, which could provide supportive wind. Bitcoin’s current market share of 55.82% still indicates a dominant position, but there is room for shifts.

On the negative side, increasing token fragmentation disperses available liquidity, while venture capital investments are declining. This makes it harder for a broad altcoin season to flourish. On-chain activity remains cautious so far, without a mass influx of new users.

How to Stay Prepared?

For those speculating on the next altcoin season, some monitoring essentials are indispensable: watch Bitcoin’s market share (when it clearly drops below 50%, alarm bells may ring), follow trading volumes for altcoins, scan macroeconomic policy decisions regarding interest rates, and observe regulations. These factors together provide a more reliable picture than any single signal.

Although the timing of the next altcoin season remains uncertain, history shows that patience pays off. With increasingly favorable regulations and liquidity recovery, the chances are growing that altcoins will soon have their moment.