What the indicators indicate about BTC and alternative coins in May 2025
The cryptocurrency markets are experiencing exciting transformations between Bitcoin's dominance and the rise of alternative coins (Altcoins). As May 2025 approaches, traders are closely monitoring indicators that may determine the market direction. In this article, we will review the key factors that help you understand whether it is the right time to focus on Bitcoin or invest in alternative coins, and how to adjust your portfolio accordingly. 🌐💰
1. Bitcoin dominance (BTC.D): The largest indicator
"Bitcoin dominance" measures its market value ratio compared to the total cryptocurrency market. An increase in the ratio means investors are turning to Bitcoin as a safe haven, while a decrease indicates a risk-taking trend towards alternative coins.
• May 2025 status: Bitcoin dominance is touching a resistance level at 58%, a level not broken for months. If it surpasses this point, BTC could experience a new upward wave. If it declines, it may drop to 52%, a historical level that typically triggers upward waves for alternative coins.
• Investment advice: Watch for a weekly close above 58% to support Bitcoin, or a breakdown as a signal for Altcoin rises. 📊
2. Alternative coin season indicator: Opportunity threshold
This indicator shows whether 75% of the top 50 alternative coins have outperformed Bitcoin over the past 90 days. Surpassing this threshold often indicates the start of "Altcoin season."
• May 2025 status: The indicator is at 68%, with coins like Solana (SOL), Chainlink (LINK), and Toncoin (TON) showing strong performance, particularly in the AI and DeFi sectors.
• Investment advice: If the indicator reaches 75%, increase your holdings in alternative coins. Until then, maintain a balance between BTC and alternative coins. 🚀
3. Capital rotation: Follow the flows
Capital typically shifts from Bitcoin to alternative coins after BTC reaches a temporary peak, as investors seek higher returns.
• On-chain indicators:
• Bitcoin reserves on exchanges: A decrease indicates accumulation (HODLing), which reduces selling pressure.
• Stablecoin liquidity: An increase in Tether (USDT) and USD Coin (USDC) deposits on exchanges often signals an influx of funds into alternative coins.
• May 2025 trend: Stablecoin inflows have risen to a 6-month high, while Bitcoin reserves have decreased by 12% since April. 📉
4. Volume movements and the Ethereum to Bitcoin ratio (ETH/BTC)
• Trading volume: When alternative coin trading volume exceeds Bitcoin's for weeks, it's a bullish signal. In May 2025, Altcoin volume makes up 65% of total trades, compared to 54% in the first quarter.
• ETH/BTC ratio: Reflects Ethereum's strength, which is considered a gateway to the rise of alternative coins. The ratio rose 18% in May after a record low, and if it continues, it could propel Altcoins forward. 🔝
5. Sentiment indicators: Public psychology
• Social media buzz: Mentions of alternative coins (like meme coins and RWA Tokens) have increased by 40% monthly on platforms like X and Telegram.
• Fear and greed index: At 74/100 ("greed" stage), where investors tend to take risks with alternative coins after Bitcoin stabilizes. 😅💸
How to adjust your portfolio in May 2025?
• If Bitcoin dominates: Focus on BTC ETF funds, and use high liquidity to buy during downturns.
• If Altcoins dominate: Diversify your investments across promising sectors such as artificial intelligence, decentralized infrastructure (DePIN), and real-world assets (RWAs).
• Volatility management: Use Binance's automated trading bots to implement strategies like automatic buying at intervals or taking profits at specific levels, from here: 🤖💼
https://www.binance.com/en/trading-bots
Summary: Adapt to the market rhythm
May 2025 appears to be a critical month. While Bitcoin's dominance stands at a crossroads, alternative coins present rising opportunities. Monitor the dominance indicator (BTC.D), the Altcoin season indicator, and the ETH/BTC ratio daily to determine your direction.
In both scenarios, stay flexible. Platforms like Binance offer advanced trading tools to capitalize on available opportunities! 🌟📈
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