XRP, DOGE, and SOL lead the wave of cryptocurrency selling, but the altcoin season is still in effect.
A Coinbase analyst pointed out that Bitcoin's dominance has lost a key level, and confirming this may spark a broader altcoin season.
While Bitcoin
$117,420.40
Despite the slight decline in Bitcoin prices, other major cryptocurrencies have dropped in recent days, casting doubt on the sustainability of what is termed altcoin season.
#XRP$3.1235
DOGE$0.2353
Data from CoinDesk showed that SOL (SOL) for Solana and the top 10 cryptocurrencies fell on Friday, each declining about 5% in the past 24 hours. Since their highs on Wednesday, both XRP and DOGE have dropped about 18%, while SOL has fallen 12% during the same period. The CoinDesk 80 index, which includes mid-cap tokens outside the CoinDesk 20 index, lost 10% from its weekly peak.
Meanwhile, the price of Bitcoin (#BTC🔥🔥🔥🔥🔥 🔥🔥🔥🔥🔥) was trading at around $116,000, down slightly more than 3% from its mid-week peak of $120,000. Ethereum (ETH) fell 4% from its weekly high, supported by a steady accumulation from crypto treasury strategy firms.
When does altcoin season start?
The sharp sell-offs in recent days followed weeks of massive capital inflows into smaller cryptocurrencies, raising speculation about the start of altcoin season. This period, sometimes referred to as altcoin season, occurs when smaller, riskier digital currencies outperform Bitcoin, the leading digital currency, for an extended period.
The CoinGlass Altcoin Season Index, which measures the dominance of the altcoin market over Bitcoin (BTC) on a scale from 0 to 100, dropped to 41 on Friday from 59 on Monday, the strongest reading since the speculative wave in late January that followed President Trump's inauguration.
However, the altcoin market as a whole (excluding stablecoins) has seen a rapid rise, nearly doubling in value since April, according to David Dong, head of research at Coinbase, in a report released on Friday.
The report noted that this week's decline is due to excessive leverage being used by traders in altcoin bets.
The report noted that the Open Interest (OI) dominance index of altcoins, which compares the dollar investment volume in altcoin derivatives contracts to Bitcoin contracts, has risen to 1.6, a level that preceded previous market shocks. Dong wrote that a decline in this index indicates a healthy reassessment of leverage in the altcoin market, otherwise more shocks are expected.
For an extended altcoin season, investors should monitor the Bitcoin dominance index, which measures Bitcoin's share of the total cryptocurrency market capitalization. The report indicated that this index has fallen below its 200-day moving average for the first time since shortly before January 2025.
Dong wrote: 'The continued decline below the 200-day moving average may validate the 'altcoin season' narrative, which has historically preceded periods of superior performance of altcoins lasting several weeks (like in 2021).'
However, it may be better for traders to wait for consecutive sessions of closes below the desired level before entering altcoin bets to adopt a 'more cautious stance,' he added.
