The crypto market is entering a vibrant phase as Bitcoin officially surpasses $100,000 on May 8, marking the highest price since early February 2025.
This significant milestone has added nearly $300 billion to the total market capitalization, while also triggering a lively debate about Bitcoin's next trend as well as the breakout prospects of various altcoins.
"Banana Zone" activated?
Veteran investor and Real Vision founder, Raoul Pal, believes that Bitcoin's dominance ratio (BTC.D) peaked on May 8, 2025 — coinciding with Bitcoin surpassing the $100,000 mark.
According to data from Bitcoin Magazine, BTC.D has dropped from 65.38% to 63.84% in just two days, marking the strongest correction after two months of continuous growth. This is a signal that Pal believes holds significant meaning for market trends.
BTC.D 1-day chart | Source: TradingView
Pal analyzes that the current BTC.D peak is significantly lower than the peaks of 2021 and 2017, which aligns with historical cycles of the crypto market. Based on multiple technical indicators, including DeMark peaks on daily, weekly, and monthly charts, Pal believes the market is entering a new phase he calls the "Banana Zone."
"I believe BTC.D peaked today. Technical signals across multiple time frames are in agreement, and the current peak is lower than the peaks of 2021 and 2017. If true, this opens the next phase of the Banana Zone," he stated on May 8.
"Banana Zone" is a term coined by Pal to describe a parabolic explosive growth phase in the cryptocurrency market, especially with altcoins. During this phase, funds tend to flow out of Bitcoin into alternative assets in search of higher profits.
However, Pal's viewpoint has also faced criticism. Analyst Mark Harvey believes that BTC.D could continue to rise sharply and even approach 100% — a scenario that nearly absolutizes Bitcoin's position in the market.
Harvey argues that the emergence and extraordinary growth of spot Bitcoin ETFs, along with substantial capital from institutional investors, will continue to reinforce BTC's dominant position, pushing back the opportunities for altcoins in the short term.
The altcoin season index is showing signs of improvement
While the debate about Bitcoin's dominance trend continues, data from CoinMarketCap's Altcoin Season Index shows a notable signal: this index has just hit its highest level in two months at 41 points.
Although still below the 75-point threshold — the official mark for an "altcoin season" — this index has escaped Bitcoin's absolute dominance and entered neutral territory, signaling that market sentiment is gradually leaning towards altcoins.
Altcoin Season Index chart | Source: CoinMarketCap
Renowned analyst Merlijn The Trader shares an optimistic view on this trend. Based on the Altcoin Season Index from Blockchain Center, he notes that the index has broken a multi-month downtrend — an important technical sign that the altcoin season is beginning to form.
Not stopping there, Merlijn points out that Tether Dominance (USDT.D) is in a downtrend. This indicates that investors are pulling money out of stablecoins to return to higher-risk assets like altcoins, further reinforcing the market reversal signal.
"The altcoin season signal has just been activated... The index has broken the long-term downtrend, and Bitcoin's dominance is weakening. If you haven't positioned yourself right now, you might be left behind as liquidity flows into altcoins," Merlijn warns.
Is the market at a crossroads?
The opposition between viewpoints — from Bitcoin continuing to dominate to the possibility of altcoins leading — further highlights the multidimensional and unpredictable nature of the current cryptocurrency market.
Could this be the transition moment when Bitcoin gradually hands the stage over to altcoins, or is it just a short-term correction before Bitcoin solidifies its position? The actual developments in the coming weeks, especially under the influence of investor sentiment and macroeconomic factors, may provide a clearer answer.
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