Bitcoin Hits New High, But Dominance Decline Paves Way for New Altcoin Season?
Bitcoin has continued to demonstrate its leadership, setting a new all-time high in July 2025. However, an unexpected but potentially promising signal has emerged: Bitcoin’s BTC Dominance (BTC.D) is falling while altcoin capitalization is growing rapidly. This development has led many analysts to believe that an “altcoin season” a strong growth cycle for non-Bitcoin cryptocurrencies may be forming.
Altcoin Capitalization Outpaces Bitcoin in Early Sign of New Cycle
According to data from TradingView, the total altcoin market capitalization (TOTAL2) has increased by nearly 10% since the beginning of July, surpassing the $1.2 trillion mark. At the same time, BTC Dominance has dropped from 66% to 64.5% the largest decline since May this year.
What is remarkable is that even as Bitcoin surpassed the $111,000 all-time high, its dominance continued to decline. This proves that altcoins are attracting more money than Bitcoin in the current phase, a phenomenon that usually only appears in the early stages of altcoin season.
Bitcoin's stability may be a "launch pad" for altcoins
A widely shared view is that altcoin season does not necessarily require Bitcoin to correct sharply. According to the anonymous analyst Master of Crypto, as long as Bitcoin trades in a stable price range and BTC.D continues to decline, the market will automatically facilitate capital flows to small and mid-cap tokens.
He emphasized that the degree of decline in the dominance index will determine the "intensity" of the altcoin season. If BTC.D breaks the 50-day EMA, there could be a slight increase in small altcoins. However, if the index continues to fall below the 200-day EMA, as has happened in previous major altcoin seasons, a full-blown rally, including ETH, SOL, and meme tokens, is entirely possible.
Stablecoin Accumulation: Big Money Waiting for Opportunity
An important factor that further strengthens the altcoin season hypothesis is the increasing accumulation of stablecoins, especially USDT and USDC, on exchanges. According to CryptoQuant analysis, the total stablecoin volume on Binance has surpassed $31 billion, while the amount of Bitcoin on the exchange has been continuously decreasing due to withdrawals to cold wallets.
This shows that investors are in a waiting mode: they are ready with “dry powder” a term referring to unused money and are just waiting for a clear signal to re-enter, most likely into the altcoin market.
Previous “Altcoin Season” Calls and Lessons from the Past
Although current data points to the potential of an altcoin season, the market remains somewhat cautious. In recent years, altcoin season expectations have repeatedly appeared but have not brought the expected results, leaving the community skeptical.
This defensive mentality is evident in discussions on social media and trading forums. Many retail investors are still cautious, not daring to “put money in” due to concerns that the altcoin season may be a short-lived rally or manipulated by whales.
However, according to analyst Michaël van de Poppe, this skepticism is completely normal and often marks the first stage of new growth cycles. When retail investors are skeptical, the biggest opportunities often appear for those who dare to go ahead of the crowd.
Will ETH, SOL and meme coins return to the race?
If the current trend continues, large-cap altcoins like Ethereum (ETH), Solana (SOL), along with meme coins like DOGE, SHIB, or emerging projects could be the driving forces. Altcoin ETFs are in the process of being approved in many countries, and institutional interest in blockchain solutions like Layer 2, DePIN, or RWA is also growing.
Technically, a confirmation signal from BTC.D breaking below key support levels could trigger stablecoin inflows, creating a new bull cycle across the board.
Conclusion
Bitcoin may have hit a new high, but market signals suggest that the leadership role is gradually being shared with altcoins. The gradual decline in BTC dominance, coupled with large stablecoin inflows on exchanges and rapidly increasing altcoin capitalization, is creating the perfect technical and psychological setup for a potential altcoin season.
While investors remain cautious due to previous failed calls for an “altcoin season,” current data paints a different picture: a recovery cycle with smart money quietly preparing to act.
If the altcoin surge materializes, summer 2025 could be the next big turning point in the crypto market.