Altcoin Rally Set To Begin As Bitcoin Dominance Weakens: Analysts

Analysts believe a new altcoin rally could be starting. Bitcoin’s dominance is showing early signs of reversing. Altcoin Season Index data now signals a market transition, with altcoins preparing to outperform Bitcoin in the coming weeks.

In the past, this trend has sparked strong rallies among the top 100 cryptocurrencies. Liquidity often moves from BTC and ETH into mid-cap coins during these phases.

Analyst Predicts Imminent Altcoin Rally and Market Rotation

Analyst CryptoELITES expects the next altcoin season to start by the end of October. He believes this could trigger a strong altcoin rally. He says Bitcoin and Ethereum will continue to rise slightly. Additionally, the altcoins are expected to continue growing strongly once dominance is broken.

The CMC Altcoin Season Index currently sits at 27/100, placing the market deep in Bitcoin Season territory. However, the indicator has declined dramatically from 71 last month.

This indicates a possible period of transition. In many instances, this metric can be observed to drop from high to low as new liquidity flows into alternative tokens.

CryptoELITES compared the current structure to cycles 2020 and 2023. There, similar structures preceded long rallies over several months.

His chart shows the relationship between Total3, Bitcoin dominance, and gold price. Each breakout cycle has historically followed a steep BTC.D retracement.

He added that if the strength of gold and Bitcoin’s dominance is weakening, then capital tends to gravitate toward higher-beta altcoins. If they continue, he foresees November and December bringing the strongest rotation since 2021.

Historical Patterns Support a Renewed Altcoin Breakout

Technical analyst Javon Marks noted that Bitcoin’s dominance has reverted to an overbought status for the third time since 2017. Each past instance led to an explosive altcoin season. The result was a powerful altcoin rally across the market.

Marks’ chart showed BTC.D reaching around 68% before plummeting – behavior that preceded the 2017 and 2021 rallies. In both cases, the total altcoin market capitalization grew rapidly within weeks of this crash.

He observed that dominance pullbacks generally coincide with declining Bitcoin momentum and increased speculative inflows into smaller tokens. Marks added that the Altcoin Season Index reinforces this outlook.

Historically, when the index has dropped below 30, altcoins have outperformed Bitcoin for several months. He believes that the current decline is right on that threshold and suggests that another cyclical rotation is underway.

Moustache Highlights TOTAL2 Support as Signal for Upcoming Altcoin Rally

Market analyst Moustache noted that TOTAL2. This represents the total crypto market cap excluding Bitcoin, which remains above the 10-year support trendline. According to him, that line has always marked the beginning of a new altcoin season.

Between 2016 and 2018, and 2020 and 2021, similar formations preceded months of general market growth. Mustache noted that the 2022–2023 consolidation looked like a classic accumulation phase. He suggested it could set the stage for a major Altcoin rally.

He said the historical data has “never been broken in ten years,” and the current structure is “textbook bullish.” He also said TOTAL2 remains above the trendline. This validates market strength despite short-term volatility.

He noted that the drop in the altcoin season index supports renewed accumulation. This signals preparation for the next bull phase. If Bitcoin dominance continues to dissipate, institutional flows may quickly switch to the strongest altcoins through Q1 2026.

Ethereum’s Rebound Could Ignite Next Altcoin Season

Market strategist Michael van de Poppe said Bitcoin’s dominance currently mirrors the conditions seen in mid-2019. At that time, the last strong altcoin rally began. He noted Bitcoin dominance was moving towards a resistance level, and that Ethereum seemed poised to retake the lead.

Van de Poppe saw ETH potentially rallying to $5,000 after dominance is regained. “When the Bitcoin slows and the Ethereum starts to get traction, the altcoins follow,” he said. He said that this structure historically does induce rotation as investors seek higher returns in smaller-cap tokens.

He further noted that Bitcoin’s chart now resembles previous breakdowns before dominance collapses. He anticipates a full-blown rally across DeFi, gaming, and AI tokens once the next leg of the market downturn begins.

According to him, this setup could deliver “the strongest altcoin season since 2021,” provided macro conditions remain favorable.