Author: Bybit Research
Main Highlights:
Our latest quarterly report shows a significant deviation from the historical cycles of the cryptocurrency market: Bitcoin continues to dominate despite multiple historical peaks, which have not triggered the traditional off-season.
In previous halving rallies, funds have typically rotated into other coins as traders sought higher beta exposure. However, in the current cycle, BTC dominance remains on the rise, while alternative coins have struggled to show significant performance. This shift is primarily attributed to the growing influence of institutional investors. With ETFs, corporate funds, and asset managers entering the space, Bitcoin has become the preferred tool for regulated exposure.
Is the altcoin season approaching? If so, it may be delayed.
Figure 1. ETH's share of non-stablecoin cryptocurrencies before and after historical halving events (excluding 2012).
Source: CoinGecko, Block Scholes.
Although the altcoin season has not yet materialized in this cycle, the market is gradually adjusting for a more institutionalized rotation. Since April 2025, with the influx of ETFs and increasing regulatory transparency, Ethereum has outperformed most alternative coins, particularly in terms of staking.
However, the breadth of altcoins remains weak, and ETH's market share is still below the peak levels of historical altcoin seasons. This delayed rotation is attributed to structural changes in market participation, with institutions preferring large-cap assets and longer holding periods. The potential approval of staking-based ETH ETFs could act as a catalyst, marking a shift towards a more selective, quality-focused alternative season.
Despite the ups and downs of Bitcoin, it remains unchallenged.
Figure 2. BTC dominance before and after historical halving events (excluding 2012).
Source: CoinGecko, Block Scholes.
Bitcoin's role in the cryptocurrency ecosystem is changing. Its dominance remains high, reflecting its growing appeal as a macro asset for institutional investors. The launch of BTC spot ETFs has brought in more stable long-term capital, reducing volatility and curbing speculative inflows into alternative coins. BTC now plays less of a cyclical triggering factor for alternative seasons and more of a cyclical triggering factor as a liquidity anchor. Its correlation with traditional risk assets has increased, indicating that Bitcoin's price aligns more with the global macro environment than with the native sentiment of cryptocurrencies.
If the altcoin season has not yet arrived, when can we expect it?
Figure 3. From November 2023 to February 2025, the share of cryptocurrency non-stablecoin market capitalization to total market capitalization by BTC (orange), ETH (purple), and all other cryptocurrencies (red), with non-stablecoin market capitalization shown on a logarithmic scale (white, right axis). Source: CoinGecko, Block Scholes.
Buyers should pay attention to several key indicators in hopes of achieving alternative trading and broader market rotation:
ETF inflows into ETH and any future products supporting staking are key signals of institutional sentiment.
Global liquidity indicators, central bank interest rate expectations, and stock market performance provide a macro backdrop for risk behavior.
In the cryptocurrency market, the ongoing dominance of ETH, the expanding open interest in altcoin derivatives, and the broadening of mid-cap assets are all key technical indicators.
Traders should also monitor changes in volatility dispersion and funding rates, as these may precede capital shifting towards higher beta alternative coins.
