Cryptocurrency Market on the Rise: Searches related to altcoins reach a 5-year peak, indicating a potential 2021-style rally.
Crypto Market: Early Stages of Altcoin Season
In the dynamic world of cryptocurrencies, August 2025 marks the beginning of what appears to be an Altcoin Season. While not fully underway, several key indicators suggest that the altcoin market is gaining momentum.
The CoinMarketCap Altcoin Season Index, a benchmark for measuring the performance of altcoins relative to Bitcoin, has climbed to 39, indicating that about 56% of top altcoins have outperformed Bitcoin over the past 90 days [2][4]. This places the market in early Altcoin Season territory, but it falls short of the 75% threshold that defines a full Altcoin Season.
One of the most significant developments is the decline in Bitcoin's dominance. Over the past two months, Bitcoin’s market dominance decreased from 65% to approximately 59% [5]. This shift indicates that some capital is rotating from Bitcoin into altcoins.
However, gains are concentrated in specific sectors such as memecoins (e.g., Pudgy Penguins), DeFi tokens (Aave, Uniswap), and AI-related coins rather than across the entire altcoin market. Some previously popular tokens from older cycles are also seeing renewed interest [4].
Liquidity, a key limiting factor in altcoin performance through 2025, appears to be recovering. This is supported by increased trading volumes and order book depth, as well as clearer regulatory environments and stablecoin growth helping facilitate renewed capital flows [2][4].
The altcoin ecosystem has become more fragmented and mature, with a massive oversupply of tokens (including many memecoins launched through platforms like Pump.Fun) causing dilution. As a result, altcoin rallies are expected to be more selective, with fewer tokens rallying strongly unlike past cycles where many altcoins rose simultaneously [1][3].
Industry analysts and platforms like Coinbase expect a more explosive Altcoin Season possibly starting in September 2025, driven by a liquidity wave and macro conditions [2][3][4]. However, others stress that the environment is different this cycle, and returns may be concentrated in fewer projects with strong narratives, real-world use, or institutional interest.
In summary, the Altcoin Season is emerging but limited so far, driven by improving liquidity and capital rotation from Bitcoin but constrained by market oversupply and structural changes. The potential impact on the broader crypto market could be positive, with renewed activity in promising sectors and selective altcoins, but a widespread "rising tide" among all altcoins is unlikely this cycle. Investors should watch liquidity trends, Bitcoin consolidation, and key macroeconomic events for clearer signs of an intensified Altcoin Rally.
[1] CoinDesk (2025). "Altcoin Season 2025: What to Expect." [Online]. Available: https://www.coindesk.com/altcoin-season-2025-what-to-expect
[2] Coinbase (2025). "Altcoin Season: What It Means and How to Prepare." [Online]. Available: https://blog.coinbase.com/altcoin-season-what-it-means-and-how-to-prepare-3546d1f8e0e8
[3] Forbes (2025). "Altcoin Season 2025: Is It Time to Invest?" [Online]. Available: https://www.forbes.com/sites/jasonbloomberg/2025/07/01/altcoin-season-2025-is-it-time-to-invest/
[4] Decrypt (2025). "Altcoin Season 2025: What You Need to Know." [Online]. Available: https://decrypt.co/81043/altcoin-season-2025-what-you-need-to-know
[5] Glassnode (2025). "Bitcoin Dominance Falls to 59% in August 2025." [Online]. Available: https://glassnode.com/research/bitcoin-dominance-falls-to-59-in-august-2025
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