Author: Biraajmaan Tamuly, CoinTelegraph; Translated by: Bai Shui, Jinse Finance
Summary
The decline in Bitcoin dominance and the strong rise of altcoins and meme coins may indicate that the altcoin market is entering a prosperous period.
USDT dominance may drop to 2022 lows, indicating that capital is accelerating its rotation into Bitcoin and other cryptocurrencies.
The cryptocurrency market shows signs that the altcoin market is about to enter an 'altseason', a period where altcoins significantly outperform Bitcoin. Technical charts and market sentiment consistently indicate that, driven by key indicators and changes in capital flow, altcoins may experience a broader rebound in May 2025.
The TOTAL2 chart (representing the total market capitalization of all cryptocurrencies except Bitcoin) has broken through the downward trend line since January 2025. This breakout is accompanied by a bullish structure breakout (BOS) on the daily chart, forming a high-low pattern.
TOTAL2 1-day chart. Source: Cointelegraph/TradingView
If it truly breaks through the resistance level of $1.25 trillion, it may support a decisive upward trend characterized by continuously rising lows and highs. This shift indicates that funds are moving from Bitcoin to altcoins.
Similarly, the Bitcoin dominance (BTC.D) chart also suggests that the market may be peaking, having fallen 4% in the past six days, marking the largest drop since November 2024. A decline in BTC dominance typically indicates that funds are flowing from Bitcoin to altcoins, allowing altcoins to gain market share and drive prices to soar collectively.
MN Capital founder Michael Van Poppe emphasized this trend and pointed out the bearish divergence accompanied by a decline in trading volume. The analyst stated:
A strong bearish divergence has appeared on the weekly chart, indicating that Bitcoin's dominance has peaked. The bear market for altcoins has ended.
Bitcoin dominance analysis by Michael Van Poppe. Source: X.com
USDT dominance may drop to new lows
Tether dominance chart has fallen to its lowest level since early February, at 4.59% on May 13. As shown in the chart below, the USDT dominance chart may find support around 3.90% as it presents a descending triangle pattern. A bearish breakout could lead to a new low since 2021, aligning with previous altcoin season levels.
USDT dominance weekly chart. Source: Cointelegraph/TradingView
The decline in USDT dominance indicates that funds are shifting to other assets such as Bitcoin and other altcoins. In the past seven days, Ethereum, XRP, and Solana have risen by 44.3%, 20.6%, and 22%, respectively, while BTC has increased by 10%.
Cryptocurrency trader ZERO IKA supplemented the signs of market recovery through deeper analysis, observing that many altcoins formed higher timeframe breakout structures above their peaks in February and March.
The analyst noted that despite recent gains, most altcoins are still 70% to 90% lower than their historical highs, indicating that the recovery opportunity is 'relatively early'.
As long as the key trends above remain unchanged, the weakening of stablecoin and Bitcoin dominance, along with the rise in altcoin market capitalization, opens the door for an altcoin boom.
