Original author: Pablo
Reprint: Daisy, Mars Finance
New highs underscore Bitcoin's dominance, while altcoins await their moment.
According to data from CoinMarketCap, the cryptocurrency market has reached a new milestone, with a total market capitalization soaring to an unprecedented $4.06 trillion. Driven by a 1.8% increase in total market capitalization over the past 24 hours, the total market cap surpassed the previous peak of $4.04 trillion. During the same period, trading volume surged to $180 billion, highlighting the renewed enthusiasm across the digital asset space.
While this achievement marks a strong rebound from earlier lows, the highly anticipated 'altcoin season' has yet to arrive.
Bitcoin's dominance remains unshakeable
Bitcoin remains the leader in the current uptrend, accounting for as much as 59.8%. On July 14, BTC reached a historic high of $123,000, and has since been trading in the $117k-$122k range. The strong performance of cryptocurrencies has driven much of the market's upward trend, solidifying their status as a primary driver of sentiment and liquidity.
Historically, altcoin seasons have followed periods of rapid Bitcoin appreciation. As Bitcoin stabilizes, investors often shift their focus to other digital assets, triggering broad rebounds in the altcoin sector. However, this rotation has not yet occurred, indicating some changes in this cycle.
Why altcoin season has not yet arrived
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Altcoin season refers to the period when alternative cryptocurrencies outperform Bitcoin on multiple metrics. Its typical characteristics include the rising dominance of altcoins, price increases that outpace Bitcoin, and heightened investor enthusiasm, leading to high trading volumes. In May 2021, the total market capitalization of the top 100 altcoins reached 130% of Bitcoin, far exceeding current levels. This is the latest major instance of such a phenomenon.
Several factors can explain why altcoins have not kept pace with Bitcoin's upward momentum. The main difference between this cycle and previous cycles is the launch of ETFs, large purchases by public companies (such as Michael Saylor's Strategy), and even the accumulation by nation-states, all of which have propelled Bitcoin.
These developments have attracted significant institutional and retail capital to Bitcoin, reinforcing its dominant position.
Meanwhile, most on-chain activity and excitement in retail are centered around meme coins, which dominate headlines and trading volumes. Platforms like pump.fun and letsBONK.fun have helped divert attention and funds from traditional altcoins, slowing their developmental momentum. As a result, the broad-based altcoin rebounds seen in past cycles have yet to materialize.
According to recent analysis by CoinGecko, altcoin season may unfold in several phases. The current phase may reflect what they describe as the second phase, where Bitcoin's explosive growth attracts significant capital, followed by increasing attention to selected high-market-cap altcoins rather than the entire altcoin market.
In this scenario, altcoins such as Ethereum, Solana, and other large-cap Layer-1 tokens may take the lead, with momentum then trickling down to smaller projects. The timing and breadth of this rotation depend on market sentiment, the stability of Bitcoin's price, and the emergence of compelling catalysts in specific industries.
Signals of a shift in focus
Although altcoins have not rebounded, there are signs that the situation may change. In recent days, Bitcoin's dominance has seen a slight decline, which historically precedes a capital shift to altcoins. Increased network activity, such as with Solana, along with a rising usage rate of decentralized applications, could catalyze the next phase of the market.
Investors often monitor Ethereum's price relative to Bitcoin as an early indicator. Strong performance from Ethereum tends to precede broader rallies in other cryptocurrencies. Similarly, increased trading volume in top altcoins and strong performance from mid-cap assets may signal the start of altcoin trading season.
Another possibility is that altcoin season may never unfold in the same manner as past cycles. The current drivers of Bitcoin, such as ETF approvals, corporate finances, and nation-state accumulation, have altered the market structure. As Bitcoin dominates speculative activity and investor attention, the conditions that once drove widespread altcoin rallies may have been permanently changed.
Outlook for the coming months
Record total market capitalization highlights the strength of the current uptrend and Bitcoin's role as a market anchor. However, altcoin enthusiasts may need to be patient. If historical patterns repeat, in the next phase of the cycle, capital may shift to alternative assets, triggering the long-awaited altcoin season.
Currently, Bitcoin is the focus. Its ongoing performance may determine the timing and magnitude of any future altcoin surges.
