Author: Cryptowrit3r
Translation: Plain Language Blockchain
One of the most discussed topics in the cryptocurrency space has always been 'altcoin season.' This is because crazy profits usually occur during this brief period. Altcoin season is seen as a major source of attracting crypto tourists, as it helps bring newcomers into the crypto space. Today, we will learn about the top four indicators for predicting the altcoin season of 2025.
1. What is altcoin season in cryptocurrency?
Altcoin season is a phenomenon known for creating crazy profits in the crypto space. This phenomenon occurs in all cryptocurrencies except Bitcoin, meaning altcoins. So think of your Solana, your BNB, your SUI, and so on. When altcoin season arrives, all these tokens start to outperform Bitcoin across various indicators, and their prices soar. Some tokens double in price within hours, while others reach a 1000% increase in less than a week.
But all good things must come to an end. This is why altcoin season usually follows a severe sell-off, marking the peak of the bull market cycle. We will see a disruption in the upward trend, with prices crashing due to massive whale sell-off pressure. When altcoin season happens during a bear market, it is often referred to as a relief rally and tends to be shorter in duration. The sell-off starts when tokens hit their high time frame (HTF) resistance levels. In high time frames, each candle represents a day, a week, or a month. This is often referred to as a trap bull, which is a favorite term of Capo in the crypto space.
Recently, there have been significant changes in the cryptocurrency market. This is because there are now millions of crypto projects operating, which means there will be a lot of projects to choose from when funds flow into the market. This could lead to diluted profits during the upcoming altcoin season of 2025, leaving many token holders disappointed. The flow of funds usually looks like the diagram below.
Let's discuss the top indicators, the four key indicators for predicting the altcoin season of 2025. We believe there are four indicators that will play a crucial role in the altcoin season of 2025:
Bitcoin Dominance (BTC.D)
ETH/BTC
USDT Dominance
Other trading pairs/BTC
Let's dissect each indicator one by one.
2. Why is BTC.D important?
BTC.D represents Bitcoin Dominance (market share). This indicator is crucial for predicting our position in the market cycle. This is because it measures Bitcoin's share of the entire crypto market. If BTC.D is at 61%, then Bitcoin controls 61% of the cryptocurrency market. Therefore, 61% of liquidity is specifically allocated to Bitcoin. Naturally, this means that it is currently Bitcoin's season, and we should expect altcoins to weaken relative to Bitcoin. When BTC.D begins to decline, it is a good sign for altcoins. This is when things get interesting, as liquidity flows more into other crypto assets, such as Ethereum, blue chips, and altcoins.
Noticed that Bitcoin Dominance (BTC.D) has reached significant resistance on the weekly chart. This means we can expect it to peak between 62-63%. If it does not peak, it will continue to rise until it possibly peaks again close to 70%. A drop below 58% on the daily chart, followed by a test of 60% that fails to close above 60%, may indicate that this 'big brother' (chad) has peaked.
The blue circles on the chart indicate the altcoin season of 2021, during which many famous crypto millionaires were born.
3. ETH/BTC Prognosticator
If you ask any crypto expert, they will tell you that ETH/BTC is one of the most important charts to watch closely. When ETH moves lower relative to BTC, altcoins tend to weaken and experience distribution (a fancy term for mass sell-off). However, when ETH gains momentum relative to BTC, you can expect the arrival of the altcoin season in 2025.
It is well known that ETH is the largest ecosystem in the crypto space, with the highest Total Value Locked (TVL). TVL is as important to a blockchain as deposits are to a bank. This is why when it rises, everything quickly goes up, and we see green candles everywhere. Observing high time frame charts, you will notice ETH/BTC has been declining for a long time. It is currently facing strong support around 0.031 and could start to reverse upwards. This could trigger the altcoin season. ETH/BTC may also reverse if it fails to drop below 0.033 and closes above 0.04.
Pro Tip: When plotting these types of indicators, be sure to use HTF candlestick charts, such as monthly and weekly, or at least daily.
4. USDT.D and liquidity flow
USDT.D is the market share of the dollar stablecoin USDT in the crypto market. Tether issues USDT, which we know is the largest stablecoin in the crypto space. This means that whenever there is buying pressure, people buy by exchanging USDT for various crypto assets.
In general, when USDT.D declines, people sell USDT to buy cryptocurrencies, whether Bitcoin or altcoins. In tough times, people flock to Bitcoin, but will purchase during Bitcoin season (remember BTC.D), as Bitcoin's price will rise. But if you see USDT.D declining while altcoin prices are rising, then liquidity is flowing more into altcoins rather than Bitcoin.
There is also a chart called OTHERS that you can find on Tradingview. This chart represents all altcoins except blue-chip stocks and the top ten projects. If this chart rises while USDT.D falls, it simply means it's the altcoin season of 2025.
A drop in USDT.D may also mean that investors are cashing out profits or panicking. If you see TOTAL1, which is the total market cap of the crypto market, also dropping during this indicator's decline, it means serious issues are happening.
You want to see this indicator drop below 4% and close weekly below that to confirm that liquidity is flowing into crypto assets. If this coincides with a drop in BTC.D, then it's time to act!
5. OTHERS/BTC Secret Formula
We talked about OTHERS, which refers to all altcoins except blue-chip stocks. A better chart is to see the performance of these altcoins (OTHERS) relative to Bitcoin. To get this chart on Tradingview, just open the search bar and type OTHERS/BTC, as shown in the image. Then look for the marked indicator and click on it.
You will be able to plot the performance of altcoins relative to Bitcoin. Simply put, whenever these altcoins gain momentum relative to Bitcoin, it is altcoin season. Whenever Bitcoin gains momentum, it is Bitcoin season. The best time to buy altcoins is when they form long-term lows relative to Bitcoin, just as they are doing now.
Conversely, the best time to sell altcoins is when they peak, which was the case in early 2022.
6. Summary
Remember, no one can predict the market's top or bottom. The best we can do is make rational guesses. These indicators help us make those guesses, but we can never get the long-term low that everyone is waiting for. The cryptocurrency market is extremely volatile and unpredictable. Never forget that. Please remember, this is educational content and should not be considered financial advice.
