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There's a widespread belief in the cyclical nature of the crypto market. According to this concept, cryptoasset dynamics often follow a recognizable pattern: Bitcoin leads, then Ethereum gains attention, and finally altcoins rise. During these periods, many high-return opportunities emerge, leaving newcomers feeling they’ve missed out.
A trader's main challenge is identifying the period of the most active altcoin growth, commonly known as altseason. However, each cycle unfolds differently and is influenced by unique market events, complicating forecasting and analysis.
Coinpaper's editorial team explored what drives altcoin growth, which metrics indicate the approach of altseason, and how to use market data for informed decisions.
Understanding Altcoins and Their Role in Altseason
Altcoins are cryptocurrencies other than Bitcoin. This category includes widely known assets like Ethereum (ETH), Binance Coin (BNB), and Solana (SOL), as well as smaller projects such as Hyperliquid (HYPE) and Aave (AAVE). Analysts classify altcoins based on their use cases or functionality, though no universally accepted standard exists.
The primary difference between Bitcoin and altcoins lies in market positioning and price behavior. Bitcoin, due to its high market capitalization, is considered a "base" asset or digital gold, while altcoins tend to be more volatile and are influenced by trends, speculation, and overall market sentiment.
Based on these distinctions, the crypto community has observed a sequence of capital flow through four phases:
- Bitcoin phase – Capital and attention concentrate on Bitcoin, which often outperforms other assets early in the cycle.
- Ethereum phase – Investors shift to Ethereum as Bitcoin's growth stabilizes, increasing interest in the Ethereum ecosystem.
- Major altcoin phase – Liquidity moves to high-cap altcoins like BNB, SOL, ADA, and others, driving growth in alternative networks.
- Medium- and small-cap altcoin phase – Investment flows into smaller tokens, including experimental projects and memecoins, often resulting in the largest price surges.
Although technically altseason begins in the second phase, the community typically associates it with the fourth, when a broad range of assets outperforms Bitcoin and Ethereum. This period is characterized by growing retail interest, heightened media activity, new project launches, and expanding market capitalization of lesser-known tokens.
Indicators Suggesting an Altseason Is Approaching
While the concept of cyclical capital flows underpins altseason theory, some analysts question its reliability. Arthur Hayes, for example, argues that four-year cycles no longer hold, while Bernstein suggests a possible extension of the bullish phase.
Other factors, such as institutional activity and macroeconomic conditions, are also reshaping traditional market dynamics. With over 100,000 altcoins and 400+ asset categories tracked by CoinGecko, establishing a unified classification system remains challenging.
The Altseason Index and Related Metrics
The Altseason Index tracks how many of the top 50 altcoins outperform Bitcoin over a 90-day period. If over 75% of these assets grow faster than Bitcoin, the market is considered to be in altseason.
As of September 2025, the index stands at 76 points, signaling broad altcoin outperformance. CoinGlass and CoinMarketCap offer similar versions, with minor differences due to calculation methods.
Additional altseason indicators include:
- Bitcoin Dominance – Measures Bitcoin's share of total crypto market capitalization. A declining trend signals capital shifting toward altcoins.
- Altcoin Trading Volumes – Rising volumes indicate genuine investor activity, beyond media hype.
- Market Sentiment and Social Activity – Social media, news, and the fear-and-greed index reflect trader psychology.
- Altcoin Capitalization – Total market cap excluding Bitcoin and stablecoins; approaching previous peaks confirms an altseason phase.
Analyzing Market Trends
Historical charts of the Altseason Index reveal how capital flows between Bitcoin and altcoins over time. In September 2025, the index reached 80 points, marking the altseason zone. The gradual rise in 2025 contrasts with the sharp, short-lived increase during the late-2024 “Trump Rally,” after which Bitcoin regained dominance.
The index’s growth correlates with declining Bitcoin dominance, which dropped from 61–63% mid-2025 to 55% by September. Historically, such declines coincide with altcoin surges. External factors, including major project launches, regulatory developments, and macroeconomic shifts, can further accelerate altcoin growth.
Forecast and Outlook for Altseason 2025
Several indicators suggest a potential altseason is underway:
- Bitcoin dominance has fallen to 54%
- Altcoin market capitalization exceeds $1.8 trillion
- The altseason index hovers around 80 points
The Federal Reserve's upcoming rate decisions could increase liquidity and drive further investment into riskier assets, including altcoins. Institutional participation is also notable: Ethereum ETFs alone attracted roughly $4 billion in August 2025, at times surpassing Bitcoin inflows.
Despite these signals, the market remains divided. Some experts believe altseason is delayed due to institutional focus on Bitcoin, while others expect a classic cycle: Bitcoin rises first, followed by Ethereum, high-cap altcoins, and finally a broad altseason.
Skeptical views highlight the lack of a strong market narrative, as seen with DeFi in 2020 or NFTs in 2021. Without such narratives, growth may remain selective, affecting only certain tokens and market segments.
Key Signals That Altseason Is Near
Altseason typically does not begin suddenly. Signs include:
- Majority of top 50 altcoins outperforming Bitcoin
- Declining Bitcoin dominance confirming liquidity shifts
- Growth in altcoin capitalization excluding Bitcoin and stablecoins
- Strengthening ETH/BTC or SOL/BTC pairs
- Rising altcoin trading volumes
- Positive social and media sentiment
- Institutional inflows via ETFs or corporate crypto treasuries
Evaluating multiple indicators together provides a clearer picture than relying on a single metric.
Conclusion
Altseason is a recognized phase in crypto cycles, characterized by declining Bitcoin dominance, rising altcoin interest, and capital flowing into riskier assets. By September 2025, many indicators suggest this phase is approaching.
However, uncertainty remains. A lack of a unified narrative, the influence of memecoins, and selective institutional involvement could limit broad-based growth. The key question for investors is whether the 2025 altseason will be sustained and widespread or short-lived and selective, similar to the 2024 Trump Rally.
