Chart showing BTC/USDT

As Bitcoin breaks its all-time high again and Ethereum begins to show meaningful rebound trends, the market's focus naturally shifts to the anticipation of whether the altcoin market will now catch fire. However, one must remember that the market's structure operates in contexts beyond mere price rises. The phenomenon known as altseason is not defined by a few specific coins rising; the key lies in how funds flow and how market participants interpret that flow. The current phase seems closer to a period of checking the potential for a shift in capital rotation rather than a short-term rally.

Understanding Bitcoin Dominance as an Altcoin Rally Signal

Chart showing Bitcoin Dominace

The first criterion for judging market structure is Bitcoin dominance. This indicator distinguishes whether liquidity entering the market is staying solely in Bitcoin or gradually moving to Ethereum and altcoins. A true altseason occurs when funds progressively flow from Bitcoin to Ethereum and then to mid- and small-cap altcoins.

If Bitcoin's dominance forms a peak and turns downward, it can be interpreted as a signal that funds seeking higher returns are starting to move to other sectors. Recently, despite Bitcoin's new highs, dominance has been stagnating or slightly declining, which appears to be a turning point worth watching closely. If this trend persists, it's hard to ignore the possibility that the market's balance is tilting toward altcoins.

The Role of ETH/BTC Ratio in Altseason Signals

Chart showing ETH/BTC

In the same vein, the ETH/BTC ratio plays a crucial role. The real starting point of altseason has always coincided with the rise of this ratio. When Ethereum begins to show strength against Bitcoin, the market accepts it as a signal of structural recovery. This is not just because of its position as the second-largest by market cap, but because Ethereum serves as a central hub connecting DeFi, L2, NFT, and infrastructure ecosystems. Ethereum's strength implies more than just price; it suggests the recovery of demand across the entire alt market.

If the ETH/BTC ratio consolidates at the bottom and continues its rebound, it could be seen as a clear 'first confirmation signal,' providing investors with reason to reassess their altcoin portfolios.

Broader Market Factors Influencing Altcoin Rallies

That said, it's still too early to draw firm conclusions. While funds concentrating in some thematic altcoins are detectable, it's hard to view this as spreading to the entire market. For instance, the recent rises in tokens related to AI, RWA, and DePIN are closer to localized rallies driven by specific narratives rather than a broad alt market uptrend. For an environment worthy of being called altseason to form, widespread concurrent rises must appear across Ethereum-based projects, neglected mid- and small-cap chains, various L1 and L2 ecosystems, and thematic DeFi and NFT projects. Particularly, without accompanying recovery in trading volume and on-chain metrics, the market is unlikely to sustain on short-term expectations alone—a critical perspective is needed here. These indicators serve as keys to gauging market health, steering away from fixation on mere price fluctuations.

Moreover, altseason has always emerged in market cycles after Bitcoin's stable rally. In phases where Bitcoin repeats sharp ups and downs, funds seek stability, which acts as poison to the alt market. Conversely, when BTC stabilizes at a certain high or enters a sideways phase, market participants then turn to risk assets for greater returns, and that's when the altcoin market starts to stir. The current situation being merely the 'initial stage of fund movement' suggests that excessive optimism should be guarded against.

External Economic Triggers Like US Rate Cuts

Fed Rate Cut Probabilities from CME FedWatch Tool: Essential Signals for Anticipating Altcoin Rally in H2 2025

If expectations of U.S. interest rate cuts, signs of liquidity re-expansion, and tech stock-led stock market rises align, a full-fledged risk-on flow could form in the cryptocurrency market as well. In such a case, funds are likely to flow sequentially beyond Bitcoin to ETH and the entire altcoin market. Especially, with institutional funds accessing the market through various channels like stablecoins and BlackRock ETFs, the current flow creates an environment where altseason can be designed on a foundation entirely different from the past. While these external factors can promote structural changes in the market, considering that their effects may not be immediate calls for flexibility in investment strategies.

Bitcoin's current movements are not significant on the surface. Amid fluctuations of around 2%, it even shows patterns of digesting selling volume in a box range retest phase. Observing whether small buys are gradually entering in this range or if selling resumes at resistance levels is more important. Real bull markets often create vertical rises without giving time to buy. If the market is giving time for many to ponder support and resistance and worry about corrections, it also means it's still early. In other words, it's not too late. Rather, if meaningful corrections emerge in this process, that point could become a buying opportunity. Strategies focusing on accumulating spot positions in major coins like Bitcoin, Ethereum, Solana, and Ripple remain valid. Full-fledged rallies usually start not after people's convictions form, but while doubts linger.

While Bitcoin shows volatility of 1-3% per day, opportunities are more frequently observed on the altcoin side. Especially since the overall market hasn't entered an overheated phase on a spot basis, strategies to accumulate positions in such phases may be reasonable. More important than short-term fluctuations is where funds are residing and in which direction they are moving. This could be the starting point of that transition.

Chart of the Altcoin Season Index

Of course, the futures market now offers environments for significant profits. But looking back at past flows, in phases where bull markets fully materialize, investors maintaining consistent spot portfolios often recorded higher returns. Short-term trading is a means to maximize momentary profits, but when the market starts riding a structural uptrend, long-term holding strategies can work more advantageously. This is even more so in phases where market vitality is reviving like now.

Particularly, fixating on daily charts, immersing in daily market updates on cafes or communities, or relying on overly amplified macroeconomic analyses to time buys often leads to getting caught in FOMO psychology. But the market doesn't wait for such interpretations or predictions. Directions don't change immediately just because rates rise slightly or inflation stabilizes somewhat, and in fact, Bitcoin has broken new highs amid such debates. This approach may seem analytical on the surface, but in reality, it tends to lead to fixation on instant profits, pushing oneself into increasingly unstable states. Above all, even when the market starts to grasp a full direction at crucial points, most are not prepared to ride that flow.

A single trading mistake can damage an account, or conversely, missing one opportunity can leave one watching the entire bull market from the sidelines. Given that the current market environment favors structural and long-term strategies more, taking such risks seems unwarranted. Reflecting back, investors who consistently held spot or some futures from April onward would now be in sufficient profit zones. The likelihood is high that this yielded far better results than repeated frantic trading daily. Ultimately, attempts to time the market often lead to frequent failures, whereas those riding structural uptrends gain the effects of compounding through time and direction. Approaches that are not sustainable or recoverable can become causes for pushing oneself out of the market even in bull phases.

Psychology of a Market Cycle: Key Emotional Signals for Predicting Altcoin Rallies and Altseason in H2 2025

For some, this phase may be a time to prepare for new opportunities, while for others, it could be interpreted as a section to trim positions or reduce risks. But what's important is clearly establishing one's strategy and building a portfolio accordingly. While it's not yet possible to assert what flow's starting point this is, it seems sufficient timing as preparation to close out the fourth quarter of this year with meaningful profits. Approach it with a strategic perspective, without being too hasty but without missing the flow.