Altseason Delayed? On-Chain Data Signals Bitcoin Dominance Ahead of October Peak

Key Insights

• Altcoin volume data remains negative, showing weak demand as traders continue to favor Bitcoin positions.
• Bitcoin’s CapFlow Sentiment Index is approaching distribution territory, mirroring past market tops in earlier cycles.
• Ethereum/Bitcoin ratio shows historical setup repeating, yet ETH remains subdued while Bitcoin keeps gaining ground.

Altseason hopes are damping down as new on-chain and technical evidence shows a heavy bias towards Bitcoin in 2025. Though traders were hoping to see an altcoin recovery, the market indicators are suggesting that BTC will dominate as the supply becomes tight, and the investor sentiment is in line with the historic cycle tops.

As October has become the new target of an inflection point, signals are flashing of a maturing market.

Supply-Side Dynamics Point to a Tightening Bitcoin Market

The issuance of bitcoin remains at low levels historically following the latest halving. According to Glassnode data, the daily issuance is now under 500 BTC per day, compared to more than 1,500 BTC prior to 2020.

At the same time, old supply, that is, coins that have not moved in 10 years or more, is increasing at a rate exceeding the rate of new supply entering the circulation.

This tendency is important, as it indicates a growing proportion of BTC in the possession of long-term players who are not selling. Consequently, the supply of liquids is decreasing as the demand of institutional buyers and ETFs remains. This is a bullish backdrop, particularly with issuance stagnating.

Moreover, the issuance is low and the ancient supply is increasing, which reduces the pressure of selling on the network. In contrast to altcoins, which regularly experience inflationary emissions or vesting unlocks, the issuance of Bitcoin is predictable and disciplined.

Being aware of this disparity, investors still prefer BTC as a more secure store of value under unclear macro conditions.

Altcoin Metrics Suggest Weak Momentum and Delayed Rotation

On the contrary, the flow of altcoin volume remains unbalanced. CryptoQuant reports that the 1-year cumulative buy/sell quote volume difference of altcoins (but not BTC and ETH) is severely negative.

This implies that sellers are dominating buyers on centralized exchanges, and this indicates that there is still no confidence in the wider altcoin market.

In the past, altseason is a period when this volume trend reversed and buyers started hoarding smaller assets aggressively. However, this reversal has not occurred yet. In the absence of this transition, there will be no big altcoin rallies, at least not in the risk-off environment.

To further the bearish sentiment, the Altcoin Season Index released by BlockchainCenter is at 25, far below the 75 mark required to be considered altseason. The tool is a summary of performance among the leading altcoins against Bitcoin. The index proves that capital is not rotating into speculative assets, but is still accumulating in BTC.

In the meantime, the performance of Ethereum compared to that of Bitcoin is slow. The pair ETH/BTC is trading in a downward channel. As analysts have pointed out, this formation is similar to the breakout experienced earlier in 2017, when ETH rose as BTC retraced. However, ETH has failed to demonstrate the power or breakout validation to replicate this action in 2025.

CapFlow Index and Bitcoin Dominance Reinforce BTC Bias

Alphractal is also giving key cycle indications with its Bitcoin CapFlow Sentiment Index. It is a measure based on on-chain capital flow and momentum oscillators to determine accumulation and distribution periods. By mid-June, the indicator is moving up to the red distribution area.

In the past, the market has been at the peak of the bull market when the CapFlow index is at such high levels. The price action is usually strong at this time, but volatility increases as early sellers cash in. The index has also given such warnings in late 2013, early 2018, and late 2021, all of which were followed by a wider market decline.

In addition, the dominance of the Bitcoin over DXY, which is a relative indicator of the performance of the BTC against the U.S. dollar index, is also approaching a resistance level. The weekly chart on a long-term basis indicates that BTC.D/DXY has hit the top of a multi-year downward channel, where it has reversed previously.

However, as macro uncertainty and lack of rotation into alts persist, there is a chance that Bitcoin will break this resistance and continue its market dominance even more.

This trend is also supported by layer 1 ecosystem metrics. Ethereum, BNB and Solana remain at the top of the fully diluted valuation (FDV) lists. New entrants such as Hyperliquid and Sui have made progress but remain far behind in active market cap and user adoption. This imbalance also prevents the overall altcoin sentiment to recover.

Disclaimer

This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.