based on materials from the site - By Yellow News

Bitcoin dominance has fallen to a six-month low of 59%, while the market capitalization of altcoins has grown by more than 50% since July. Inflows of institutional investment into Ethereum ETFs exceeded $2.3 billion, which analysts say marks the beginning of a full-scale altcoin season set to start in September.

According to analysis from major exchanges and institutional research firms, there are clear signs of a potential altcoin season in the cryptocurrency markets as Bitcoin's market dominance continues to decline and institutional capital increasingly flows into alternative cryptocurrencies.

According to data tracked by several market analytics platforms, Bitcoin's market dominance has dropped from over 64% to about 59%, indicating a shift in capital toward altcoins.

David Duong, head of global research at Coinbase Institutional, wrote in a monthly review that current market conditions indicate a "potential transition to a full-scale altcoin season as September approaches." The company defines an altcoin season as a period when at least 75% of the 50 largest altcoins by market capitalization outperform Bitcoin over the previous 90 days.

Ethereum, the largest altcoin by market capitalization, led the latest rally, rising more than 20% this week, bouncing off support levels and reaching local highs above $4200. Ethereum outperformed Bitcoin, showing a 54% increase over the last month compared to 10% for Bitcoin, reflecting the capital rotation characteristic of altcoin seasons.

The main driver of this trend has been institutional demand. Inflows into Ethereum ETFs reached $2.3 billion in August 2025. Major players like BlackRock have contributed to what market observers call unprecedented institutional demand for alternative cryptocurrencies. On August 7, 2025, BlackRock and Fidelity led inflows into Bitcoin and Ethereum ETFs totaling $503 million, primarily driven by IBIT BlackRock and FETH Fidelity.

The regulatory environment has provided additional support for institutional adoption. Approval by the U.S. Securities and Exchange Commission (SEC) for the redemption of ETFs in kind has increased market liquidity and investor confidence, creating, according to analysts, a more stable foundation for cryptocurrency investments.

Macroeconomic conditions are creating additional favorable circumstances for risky assets, including altcoins. The consumer price index rose 0.2% in July, easing market concerns about Trump's tariffs and bolstering bets on a Federal Reserve rate cut in September. Futures markets are now pricing in about an 87% chance of a rate cut at the next Federal Reserve meeting.

Two of the 12 members of the Federal Reserve's Open Market Committee voted for a 0.25 percentage point rate cut at the last meeting, indicating a growing desire for the central bank to ease monetary policy, which could benefit high-risk assets.

A Coinbase study noted that "significant retail capital is on the sidelines" in money market funds, and a Federal Reserve rate cut could potentially open up "broader participation from retail investors in the medium term." Lower interest rates typically attract fresh capital to markets and serve as a catalyst for alternative investments like altcoins.

As of July 21, 2025, Stellar (XLM) leads in this regard, rising 74% over the week and trading at $0.527, according to data from major exchanges. Other notable achievements include various layer-one blockchain protocols and decentralized finance tokens that have benefited from increased network activity.

The decentralized finance (DeFi) sector is thriving: trading volume on decentralized exchanges (DEX) reached $876 billion in Q2 2025, a 6.2% increase from the previous quarter. This provides fundamental support for DeFi-related tokens, which often show higher returns during altcoin growth seasons.

The stablecoin sector has also received a clear regulatory framework that could facilitate broader cryptocurrency adoption. With the passage of the GENIUS Act on July 19, 2025, stablecoins reached an important legal milestone, confirming their clear regulatory foundation in the U.S.

As markets approach September, it appears that a combination of factors is contributing to the likelihood that the altcoin season could be prolonged. A combination of declining Bitcoin dominance, inflows of institutional capital through ETFs, favorable monetary policy expectations, and increased regulatory transparency has created conditions that historically preceded significant outperformance of altcoins.

However, analysts warn that despite positive preliminary indicators, further institutional adoption and clear fundamental catalysts beyond technical momentum are needed to sustain the altcoin season. The coming weeks will be crucial in determining whether current trends can elevate altcoin season metrics above the 75 threshold, confirming a full-scale market departure from Bitcoin dominance.


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