Key Insights
Bitcoin's market dominance has recently dropped from over 65% to 63.89%.
This coincided with BTC crossing $100,000 and historically means that a capital rotation into altcoins is happening.
Ethereum has seen a massive 64% gain in the last month, and its ETH/BTC ratio is rebounding from 2020 lows.
Unlike past cycles, altcoins may need more external drivers rather than Bitcoin's gains to outshine BTC.
While we might not see a definitive "altcoin season" like the 2021 jump, current indicators show that there is hope.
For months, Bitcoin’s dominance has remained high and even reached over 65% earlier this year.
However, recent changes in price action, trading volume and investor sentiment might be pointing towards change.
The question on everyone's mind now is, “Is May 2025 the beginning of the altcoin season?”
Here’s a look-through of the biggest indicators and the possible capital rotation from Bitcoin into the altcoins.
Is this cycle really different from the past?
Bitcoin Dominance Takes a Hit
Bitcoin’s market dominance recently dropped from above 65% to 63.89%.
This decline is especially interesting, considering how it coincided with BTC crossing the $100,000 mark again for the first time since February 3.
Historically, when Bitcoin dominance falls while prices are on the rise, it tends to be a sign that capital is starting to rotate into other assets.
In other words, altcoins.
Ethereum has been a high performer over the last month, with a staggering 64% gain within this timeframe.
Other major performing altcoins include Solana, Dogecoin, Cardano and XRP, all of which are also up by double-digit percentages within this timeframe.
These surges aren’t just random. Instead, they come at a time when traders and analysts are on the lookout for any signals of market rotation.
ETH/BTC Ratio Rebounds from 2020 Lows
Ethereum’s price performance isn’t the only indicator that a price move could be incoming.
The ETH/BTC ratio, which measures Ethereum’s strength relative to Bitcoin, has been a major source of hope for investors.
Before now, this metric had been in a major downtrend and even hit its lowest level since 2020 recently.
Now, however, this ratio is bouncing back, and the rebound could be a sign of structural shift within the market.
When this happens, capital starts flowing from BTC into Ethereum and into the altcoin market.
If this trend continues, it could create the perfect environment for a continued altcoin rally over the coming weeks and months.
Is This Cycle Different?
The truth of the matter is that altcoins may need new capital to rally.
This change in market behavior shows that the altcoins may not benefit from Bitcoin’s gains as they did in the past.
Instead of waiting for a capital rotation, altcoins might now need an external driver to push for a breakout.
This could be difficult, especially with many retail investors still hesitant after the deep corrections of 2022 and 2023.
This kind of “capitulation” could drag out altcoin underperformance unless a strong catalyst shows up to reverse the trend.
Still with sentiment changing and Bitcoin dominance pulling back, some believe altcoins are starting to find their footing again.
Macro Factors Could Help Fuel a Rally
Beyond crypto-specific metrics, macroeconomics may also support a shift toward riskier assets like altcoins.
The US Dollar Index (DXY) recently dropped to a three-year low, which highly benefited assets like Bitcoin and gold.
BTC quickly responded by breaking above $87,000 and is now trending even higher, above $110,000, as of writing.
At the same time, gold surged to an all-time high of $3,456 with more than 50% gains over the past year.
This combined rally in BTC and gold shows their role as inflation hedges even more, with the narrative being stronger for Bitcoin in particular.
However, for altcoins to join the ride, they’ll likely need more than just macro tailwinds.
So, Is Altcoin Season Finally Here?
There’s no surefire signal that altcoin season has come or is even close. However, there could be several signs pointing towards this move.
Bitcoin’s dominance has dropped, Ethereum is gaining ground, and the ETH/BTC ratio is rebounding.
However, the lack of internal rotation from BTC to altcoins, as seen in previous cycles, may mean this season could happen more slowly.
Instead of an explosive rally across all tokens, we may see select altcoins perform well based on utility, partnerships or investor interest.
In short, May 2025 might not be the altcoin season we remember from 2021.
Still, it could be the start of a new chapter, where the next few weeks could be what makes all the difference.
