This altcoin season is probably canceled in this market cycle

The first quarter of 2025 was expected to deliver a powerful altcoin season. Instead, altcoins kept crashing to lower ranges, as this cycle fully belongs to Bitcoin (BTC).

This market cycle, the Q1 altcoin season did not happen as expected. While there were rallies for specific assets, the value did not flow from Bitcoin (BTC) into other markets. As a result, BTC outperformed most narratives, while altcoins lost their status as a secure asset class.

BTC dominance steadily rose to over 60% and has not fallen to give way to altcoins. As a result, altcoin dominance only increased briefly, with just short periods of a few days that could be called an altcoin season. Data from Alphractal shows this time, only micro altcoin seasons are happening, with insufficient time for holders to realize gains.

Based on the altcoin season index at 16 points, currently, BTC is clearly dominating and outperforming the market. The lowered altcoin season index can signal both accumulation and a bear market. The altcoin season index extended its trend since January, signaling not just a buying opportunity, but a longer bearish trend.

The altcoin season index fell even more in the past week, down from around 20 points to its current levels. The index reached 12 points in July 2024, after a market drawdown, followed by a recovery. This time, another altcoin rally is less certain, as the overall global financial pressures may erase the taste for risky assets.

This is despite the recent BTC slide by 30% from its peak. BTC still trades at around $79,000, retaining most of its gains, but altcoins have lost value and narrative appeal on social media.

Both BTC and altcoins point to de-risking

The altcoin season always needed a strong BTC rally. This time, relatively weak BTC sentiment lowers the demand for riskier altcoins. Long-term holding of altcoins has led to losses in the past or the need to hold for years in hopes of a relief rally.

Until recently, BTC expanded faster than altcoins, which suggested a period of accumulation. Based on recent trading data, both BTC and altcoins are going down, suggesting more de-risking from traders and overall fearful trading.

Both BTC and altcoins are on a downward trend, signaling traders may de-risk in fears of a prolonged correction. | Source: Dune Analytics

The BTC rally in late 2024 did not extend into an altcoin season as traders did not return to older altcoins for accumulation. Instead, some of the volumes moved into meme tokens, while liquidity abandoned previous leading assets and networks.

Most of the legacy altcoins have lost between 6.7% for TRX and as much as 71.9% for Worldcoin (WLD). Even blue-chip tokens like SOL are down over 45% for the last quarter. The loss of value happened despite some of the networks hosting record activity. BNB is down 20.60% for the past three months, despite outperforming other chains based on renewed DEX activity.

Altcoin season may come for only a small group of tokens

A handful of altcoins have posted net gains in the last 90 days. Among them is Official Trump (TRUMP), up more than 19% for the period. However, TRUMP has erased over 70% of its value from its all-time peak. Other tokens with net gains include recently trending assets like Mantra (OM) and Berachain (BERA).

There are still some expectations of an altcoin season in 2025. Historically, altcoin seasons have happened a year after a BTC halving. However, this time around, only specific asset classes may recover. Meme tokens still offer some upside and robust social media presence.

DeFi tokens survive better than altcoins with no utility. Legacy assets like Litecoin (LTC) retain a stable range, as they are still used for payments and transfers. The Ethereum (ETH) price weakness is also delaying a stronger altcoin season.

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