One of the most discussed topics in the cryptocurrency space is "Altcoin Season" (Altseason). This is due to the crazy profits that often occur during this short period. Altcoin season is considered a major source attracting cryptocurrency tourists, as it helps draw newcomers into the cryptocurrency space. Today, we will explore four key indicators to predict the Altcoin season in 2025.
1. What is Altcoin season in the cryptocurrency space?
Altcoin season is a well-known phenomenon in the cryptocurrency space due to its ability to generate crazy profits. This phenomenon occurs with all types of cryptocurrencies other than Bitcoin, i.e., Altcoins. So think about your Solana, BNB, Sui, etc. When Altcoin season arrives, all these Tokens start to outperform Bitcoin on various metrics, and their prices surge. Some Tokens can double in a matter of hours, and some can increase by 1,000% in less than a week.
But all good things must come to an end. This is why Altcoin season is often followed by a major sell-off, marking the peak of the bullish cycle. We will see the upward trend interrupted and prices decline due to major sell-off pressure from "whales". When Altcoin season occurs in a bear market, it is often referred to as a relief rally and lasts shorter. The sell-off begins when Tokens hit resistance levels on a higher time frame (HTF). In HTF, each candle represents a day, a week, or a month. This is often referred to as a "bull trap," a favorite term of Capo in the cryptocurrency space.
Recently, the cryptocurrency market has changed dramatically. This is due to the fact that there are now millions of cryptocurrency projects active, which means that when capital flows into the market, there will be many projects to choose from. This could lead to diluted profits during the upcoming Altcoin season in 2025, leaving many Token holders disappointed. Capital often flows as illustrated below.
Is Altcoin season coming soon? Four indicators to assess
Let's discuss the four key indicators that will play a crucial role in the upcoming Altcoin season in 2025. We believe there are four indicators that will be pivotal in the upcoming Altcoin season in 2025:
2. Why is BTC.D important?
BTC.D represents Bitcoin Dominance (market share). This indicator is very important for predicting our position in the market cycle. This is because it measures the percentage of Bitcoin's share in the entire cryptocurrency market. If BTC.D is 61%, it means Bitcoin controls 61% of the market share in the cryptocurrency market. Therefore, 61% of liquidity is allocated to Bitcoin. Naturally, this means that it is currently Bitcoin's season and we should expect Altcoins to be weak compared to Bitcoin. When BTC.D starts to decline, this is a good signal for Altcoins. This will be an exciting time, as liquidity will flow more into other cryptocurrency assets, such as Ethereum, green stocks, and Altcoins.
Note that Bitcoin Dominance (BTC.D) has reached a critical resistance level on the weekly chart. This means we can expect it to peak in the range of 62-63%. If there is no peak, it will continue to rise until it could reach nearly 70% before possibly peaking again. Dropping below 58% on the daily chart and then testing 60% but failing to close above 60% could indicate that this "big brother" (chad) has peaked.
3. The prophet of ETH/BTC
If you ask any cryptocurrency expert, they will tell you that ETH/BTC is one of the most important charts to closely monitor. When ETH is weak compared to BTC, Altcoins will often be weak and undergo a distribution process (a polite way to talk about a major sell-off). However, when ETH gains momentum compared to BTC, you can expect Altcoin season to arrive in 2025.
As we all know, ETH is the largest ecosystem in the cryptocurrency space, with the largest Total Value Locked (TVL). TVL is important for a blockchain like deposits are for a bank. This is why when it increases, everything tends to rise quickly and we see green candles everywhere. Observing the long-term chart, you will notice that ETH/BTC has been declining for a long time. It is currently facing strong support at around 0.031, which could start to reverse upwards. This means it could trigger the Altcoin season. ETH/BTC could also reverse if it does not drop below 0.033 and closes above 0.04.
4. USDT.D and liquidity flow
USDT.D is the market share of the USDT stablecoin in the cryptocurrency market. Tether issues USDT, and we know this is the largest stablecoin in the cryptocurrency space. This means that whenever there is buying pressure, people will convert USDT to purchase other cryptocurrency assets.
Generally, when USDT.D decreases, people will sell USDT to buy cryptocurrencies, not just Bitcoin but also Altcoins. During tough times, people will run to Bitcoin, but will buy Altcoins (remember BTC.D) because the price of Bitcoin will rise. But if you see USDT.D decreasing while the price of Altcoins is increasing, then liquidity will flow more into Altcoins rather than Bitcoin.
There is also a chart called OTHERS, which you can find on TradingView. This chart represents all Altcoins outside of the top projects and green stocks. If this chart rises while USDT.D declines, then simply put, the Altcoin season of 2025 is approaching.
The decrease in USDT.D can also mean that investors are taking profits or panicking. If you see TOTAL1, which is the total market capitalization of cryptocurrencies, also decreasing when this indicator declines, then something serious has occurred.
You want to see this indicator drop below 4% and close below that level weekly to confirm liquidity is flowing into cryptocurrency assets. If this coincides with a drop in BTC.D, then this is the time to act!
5. The secret of OTHERS/BTC
We have discussed OTHERS, meaning all Altcoins outside of green stocks. A better chart is to look at the performance of these Altcoins (OTHERS) compared to Bitcoin. To get this chart on TradingView, just open the search bar, enter OTHERS/BTC as illustrated, then find and click on the marked indicator.
6. Summary
Please remember that no one can predict the market's peak/trough. The best we can do is make reasonable predictions. These indicators help us make these predictions, but we will never have the long-term bottom that everyone is waiting for. The cryptocurrency market is very volatile and hard to predict. Never forget this. Please note that this is educational content and should not be considered financial advice.
