Last Updated on August 5, 2025 by Olga Davis
Key Takeaways
- Bitcoin dominance has dropped below key support levels, indicating that investors are moving capital away from Bitcoin and into altcoins, often a sign that an Altcoin season is beginning.
- The Altcoin Season Index has surged, with over half of the top 50 altcoins outperforming Bitcoin in the last 90 days, showing increasing strength among altcoins even though the official altseason threshold hasn’t been reached yet.
- Technical charts TOTAL2 and TOTAL3 are forming bullish cup-and-handle patterns, suggesting a potential breakout that could nearly double altcoin market capitalization from current levels.
Altcoin Season Index chart. Source: www.blockchaincenter.net
Bitcoin Dominance Drops as Altcoin Season Index Gains Momentum
Since late June, Bitcoin dominance has dropped over 6%, breaking below key support levels — specifically the 50-day and 100-day simple moving averages. At the same time, the Altcoin season index has surged, more than tripling in value. This index, which tracks how many of the top 50 altcoins outperform Bitcoin over a 90-day period, is a useful sentiment gauge. While it hasn’t crossed the 75% threshold that officially signals an altseason, the trend is clear: capital rotation is underway.
Bitcoin Dominance chart. Source: www.tradingview.com
Why Bitcoin Dominance Matters During Altcoin Season
Bitcoin dominance is a metric that shows Bitcoin’s share of the total market capitalization of all cryptocurrencies. In other words, it indicates how much of the entire crypto market’s value is held by Bitcoin compared to other coins (altcoins).
When Bitcoin dominance is rising, it usually means investors are becoming more cautious and prefer to put their money into the most reliable asset — Bitcoin — rather than riskier and more volatile altcoins. This kind of behavior is often called risk-off, where market participants avoid taking on too much risk.
On the other hand, when Bitcoin dominance falls, especially if altcoins are starting to perform well, it can be an early sign of an Altcoin season — a period when alternative cryptocurrencies begin to grow faster than Bitcoin.
Right now, we’re seeing Bitcoin dominance slip below its key moving averages for the first time in two months, which suggests that altcoins may start to outperform Bitcoin more consistently.
Altcoin Season Index Points to a Structural Market Shift
As of early August, 51% of the top 50 altcoins have outperformed Bitcoin over the last 90 days — a strong increase from June, when that figure was below 15%. While this is still below the 75% level needed to declare a formal altseason, the current pace suggests that we may get there soon.
For newer readers:
The Altcoin season index is a simple, binary tool. If more than 75% of the top 50 altcoins outperform BTC over a 90-day period, it signals that we’re in a confirmed altseason. And if you’re serious about navigating the crypto space with confidence, don’t miss our expert-backed guides — from finding the best crypto apps for beginners, to mastering Bitcoin trading strategies, learning how to sell Bitcoin safely, and uncovering the real stories behind today’s crypto millionaires.
Technical Setups on TOTAL2 and TOTAL3 Confirm the Narrative
TOTAL2 and TOTAL3 are key indicators tracking the total market capitalization of altcoins. TOTAL2 excludes Bitcoin, while TOTAL3 excludes both Bitcoin and Ethereum, focusing on a broader range of smaller altcoins.
Crypto Total Market Cap Excluding BTC and ETH, $ chart. Source: www.tradingview.com
As for the beginning of August 2025, both the TOTAL2 (total crypto market cap excluding Bitcoin) and TOTAL3 (total crypto market cap excluding Bitcoin and Ethereum) charts are exhibiting a classic cup-and-handle pattern, a well-recognized bullish technical setup signaling potential upward momentum. According to recent analyses, the TOTAL3 chart is currently testing a key resistance level around $1.01 trillion. If this resistance is broken, it could drive the altcoin market capitalization to a range of $1.8 to $2.0 trillion—a significant increase from its current level of approximately $1.01 trillion, representing a potential growth of 78-98%. Similarly, TOTAL2, currently around $1.5 trillion, is showing comparable bullish signals, with potential targets in the $2.5 to $2.78 trillion range. These projections are supported by technical analysis patterns, such as the cup-and-handle formation, and recent market trends indicating capital rotation into altcoins, suggesting that altcoins may soon outperform Bitcoin.
Macro Tailwinds Strengthen the Altcoin Case
Beyond the charts, macro conditions support the altcoin thesis:
- Liquidity is increasing. ETF inflows into Ethereum are rising, with more than 30% of ETH now staked.
- Regulatory clarity is improving. The SEC has clarified that protocol-level ETH staking is not a securities issue.
- Institutional interest is building. Firms like Sharplink are preparing billion-dollar ETH allocations, and Wall Street giants are launching tokenized products on Ethereum.
Meanwhile, Bitcoin dominance remains under pressure, suggesting that smart money is quietly rotating into altcoins with real use cases, especially in DeFi and infrastructure layers.
How to Act on Altcoin Season Index and Bitcoin Dominance Signals
The combination of falling Bitcoin dominance, rising Altcoin season index, strong on-chain trends, and bullish technical formations creates one of the most favorable altcoin setups in over a year. Tracking those indicators isn’t just for market commentary — these metrics can guide actual portfolio decisions. A declining Bitcoin dominance combined with a rising altcoin season index typically points to increased risk appetite and stronger capital flows into altcoins.
What this means in practice:
- For traders: watch for setups in high-beta altcoins, especially those showing strong relative strength versus BTC and ETH. Breakouts in TOTAL3 often coincide with broader altcoin rallies.
- For long-term investors: consider gradual rebalancing toward select altcoin sectors with growing use cases (L2s, DeFi, restaking, infrastructure). Use Bitcoin dominance trends to time entry and exit points more strategically.
- For risk management: when Bitcoin dominance is low and falling, volatility tends to increase. Use the Altcoin season index as a signal to tighten stops or hedge exposure if needed.
In this context, crypto loans can play a strategic role. When market conditions align (such as falling Bitcoin dominance, rising altcoin momentum, and bullish technical setups) some investors prefer to unlock liquidity through crypto-backed lending instead of selling their core holdings like BTC or ETH. This allows them to stay invested long term while also taking advantage of short- to mid-term opportunities.
Key advantages of this approach:
- ✅ Preserve exposure to long-term assets (e.g., BTC, ETH)
- ✅ Access liquidity without triggering taxable events
- ✅ Reallocate capital into high-potential altcoins or yield strategies
- ✅ Stay flexible in fast-moving markets
