Bitcoin’s share of the total crypto market slipped from 65.3 % to roughly 62 %, loosening its grip and giving altcoins breathing room.
Cash that once sat idle in stablecoins is leaking back into risk assets; USDT’s dominance fell from 6 % to 4.5 % in three weeks.
Capital rotation lifted the combined valuation of all non-BTC, non-ETH tokens from about $600 billion to north of $900 billion.
An analytics desk that correctly flagged the February and November 2024 rallies now signals the “first leg” of a new alt-season.
Chart breadth is improving: more tokens are trading above their 100-day simple moving averages.
The Altcoin Season Index still prints 27 (Bitcoin season), but it lags by design—momentum often flips before the gauge does.
Not every alt will shine; focusing on category leaders with real adoption may separate durable trends from fleeting hype.
1. A Crack in Bitcoin’s Armor
For most of early May, Bitcoin behaved like a black hole, pulling every spare dollar toward itself. Its dominance rate hit a cycle peak of 65.3 %, and altcoins wilted. Then, in the same week BTC punched through $100 k, the dominance rate suddenly slipped four percentage points. That small numerical move speaks volumes: it tells us that traders finally felt comfortable enough to look past the market’s flagship and rummage through the rest of the roster.
Seasoned observers know these shifts rarely happen in a vacuum. Options desks, futures basis trades, and good old-fashioned spot buyers all contribute to the push-and-pull. A lower dominance reading means altcoins are no longer simply passengers in Bitcoin’s car—they are grabbing the wheel, if only for short sprints.
2. Capital Migration: From Shelters to Plays
When fear is high, money hides in stablecoins. The recent decline in USDT’s market share—from 6 % to 4.5 %—signals that those hiding places are emptying. The exodus aligns with a $300 billion jump in the ex-BTC, ex-ETH market cap. That is not pocket change; it is an unmistakable vote of confidence in the broader field.
Under the hood, the rotation looks selective. Liquidity is flowing first into large-cap “liquid alts,” then cascading into mid-caps. Historically, this waterfall effect has marked the opening act of full-blown alt-seasons. Each step lower on the market-cap ladder tends to carry higher beta—and higher risk—so a disciplined approach is crucial.
3. Technical Breadth Is Getting Healthier
Pure price isn’t the only clue. Breadth indicators show a swelling roster of tokens reclaiming their 100-day simple moving averages. Back in February, that same pattern preceded a run where smaller coins outperformed Bitcoin two-to-one. The repetition of that footprint is hard to ignore; markets may not repeat, but they sure do rhyme.
Momentum oscillators on many alt pairs are curling upward from oversold zones. Volatility, once bottled up, is expanding—a classic precursor to large percentage moves. Yet traders should temper excitement: fast gains invite faster corrections. Think of momentum as a tide; it rises and recedes, and you want to surf, not drown.
4. Sentiment and the Macro Overlay
May’s macro backdrop turned distinctly risk-on. Equities bounced, high-yield spreads tightened, and traders dialed back bets on near-term rate cuts. In that environment, high-beta plays such as altcoins become more attractive. One analytics outfit underscored the similarity between today’s setup and the run-ups in February and November 2024. Both past episodes started with a Bitcoin rally, followed by dominance slippage, and ended in double-digit gains for select alts.
Still, the Altcoin Season Index reads only 27, squarely inside “Bitcoin season.” Why the mismatch? The gauge measures 90-day relative performance, so it lags by design. Early movers often front-run the score, forcing the indicator to play catch-up weeks later. Traders who wait for a green light from lagging metrics may arrive after much of the easy money is gone.
5. Picking Winners in a Crowded Field
History teaches that “alt-season” is rarely a blanket phenomenon; dispersion is the rule. Tokens with clear narratives—privacy, AI infrastructure, cross-chain liquidity—have already started to separate from the pack. In the last 90 days, Monero, Sui, Bittensor, and Tron have quietly outpaced Bitcoin. Their outperformance hints at larger themes: compliance anxiety, layer-1 experimentation, machine-learning demand, and stablecoin settlement rails.
Investors chasing every bright ticker risk holding a bag when sentiment inevitably sours. A more measured plan is to identify sub-sector leaders, confirm they sit above key moving averages, and pair that technical strength with on-chain usage data. In other words: marry momentum with fundamentals.
Conclusion
A subtle but meaningful shift is underway. Bitcoin’s dominance has cracked, stablecoin cash is redeploying, and breadth across the alt-sphere is improving. While the headline indicators still label this “Bitcoin season,” forward-looking metrics whisper that an alt-coin phase may already be in motion. Caution remains prudent—volatility cuts both ways—but for traders willing to sift through the noise, the opening stanza of a new alt-season might already be playing.
