Cryptocurrency analyst Simeon Koch has made important warnings about the upcoming altcoin season by drawing attention to Bitcoin's market dominance.
According to Koch, Bitcoin's market dominance needs to reach a cyclical peak for the altcoin season to start. In previous bull markets, this ratio peaked at around 70%. Currently, dominance is around 66% and is on the rise.
Last weekend, the US attack on Iran's nuclear facilities increased tensions in the Middle East. US President Donald Trump described the operation as 'a complete success', while the Iranian administration reacted sharply, accusing the US of crossing red lines and stating that all American bases in the region could be targeted. Additionally, Iran threatened to block maritime traffic in the Strait of Hormuz.
These developments have increased the perception of risk in financial markets. Just like in times of crisis, investors moved away from risky assets (especially altcoins) towards safe havens. This led to an increase in Bitcoin's market dominance, reaching 66%, the highest level in recent years. Experts consider this rise as the biggest obstacle to the beginning of the altcoin season. However, Iran's attack on the US base in Qatar, which was announced in advance, has somewhat reduced tensions.
Bitcoin dominance is the ratio between Bitcoin's market value and the total value of the entire crypto market. When this ratio increases, it means investors are holding a large portion of their capital in Bitcoin. When it decreases, money shifts to altcoins, which is considered a sign of the altcoin season.
Analyst Simeon Koch states, 'Bitcoin dominance typically peaks towards the end of bull cycles and then declines. During this decline, sudden and strong rises occur in altcoins.' However, he emphasizes that despite the high profit potential of this period, it also brings significant risks.
Koch indicates that technical indicators show Bitcoin dominance is nearing its peak. Technical analysis tools like RSI (Relative Strength Index) are in the overbought region, while the inverse correlation in the global liquidity index also suggests a potential decline in dominance soon. In such a scenario, it seems possible for capital to shift to altcoins, thus beginning the altcoin season.
When past cycles are examined, it is seen that altcoin seasons typically emerge during periods when Bitcoin dominance has consistently declined for several weeks or months. During these times, major altcoins like Ethereum, Solana, and XRP perform better than Bitcoin, indicating an increased risk appetite among investors.
Measurement tools like the Altcoin Season Index are also used to track this trend. This index indicates the start of the altcoin season if more than 75% of major altcoins have outperformed Bitcoin in the last 90 days. Currently, the Index is at level 16, indicating that Bitcoin's dominance continues.
Koch states that the altcoin season is a period in the crypto market where the highest returns are seen, but it also comes with serious risks: 'Investors want to seize opportunities when the market is most volatile. However, determining the exit time correctly is very important. As soon as the altcoin season peaks, a sharp bear market may begin.'
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