TLDR
- Bitcoin dominance is showing signs of weakening after reaching near $124,000, with altcoins starting to outperform
- Layer-1 tokens like SUI (+36%), SEI (+41%), and Ethereum (+23.3%) are leading the current rally
- CryptoQuant’s MVRV-based altcoin season indicator has flashed positive for consecutive weeks for the first time since June 2024
- Meme coin dominance has declined since the start of 2025, suggesting focus is shifting to projects with real utility
- Bitcoin’s consolidation above $112,000 could fuel further altcoin gains, but sharp BTC moves could drain liquidity from other cryptos
Bitcoin’s recent climb to just under $124,000 has created the conditions for what crypto analysts are calling the early stages of altcoin season. The world’s largest cryptocurrency has been consolidating near record highs, allowing alternative cryptocurrencies to attract investor attention and capital.
CryptoQuant’s MVRV-based altcoin season indicator has registered positive readings for consecutive weeks. This marks the first time the indicator has shown sustained altcoin momentum since June 2024, suggesting a potential shift in market dynamics.
Layer-1 blockchain tokens are leading the current rally among alternative cryptocurrencies. SUI has gained 36% while SEI has climbed 41% over the recent period. Ethereum, the second-largest cryptocurrency, has posted a 23.3% gain compared to Bitcoin’s 9.3% rise during the same timeframe.
The current altcoin movement differs from previous cycles in its focus on projects with real activity and utility. Meme coin dominance has been declining since the beginning of 2025, following problematic token launches associated with political figures.
Technical Indicators Support Altcoin Momentum
Bitcoin dominance charts show a symmetrical triangle pattern that has been forming since 2018. Technical analysts note that Bitcoin dominance recently touched the upper resistance line before being rejected, potentially signaling a breakdown that could trigger capital rotation into altcoins.
#btc alts: game on? pic.twitter.com/UWycxeAeve
— dave the wave🌊🌓 (@davthewave) July 16, 2025
The total altcoin market cap displays an ascending triangle pattern spanning nearly three years. This formation, combined with MACD indicators showing bullish crossovers on higher timeframes, suggests the potential for sustained altcoin outperformance.
CoinDesk’s CD20 index, which includes a broader range of altcoins, has outperformed the CD5 index that focuses on major cryptocurrencies like Bitcoin, Ethereum, XRP, Solana, and Cardano. This performance gap demonstrates the broader altcoin market’s strength relative to established tokens.
CoinMarketCap’s altcoin season barometer has reached 36 out of 100. This level has been seen only once in the past 90 days, indicating increased altcoin momentum relative to Bitcoin.
Market Liquidity Remains Key Factor
The sustainability of altcoin gains depends heavily on Bitcoin’s price action and market positioning. If Bitcoin continues consolidating above the $112,000 level, altcoins are positioned for continued upward movement as investors seek higher returns in alternative cryptocurrencies.
However, altcoins face liquidity constraints that make them vulnerable to Bitcoin’s directional moves. Sharp Bitcoin rallies typically drain capital from altcoins as investors chase the dominant cryptocurrency’s momentum. Similarly, significant Bitcoin declines below key support levels like $112,000 could negatively impact altcoin performance.
The current market structure shows institutions have been primarily focused on Bitcoin through spot ETFs and corporate treasury adoption. This institutional preference for Bitcoin has kept altcoins in a secondary position during much of the recent bull market.
Trading volumes and capital flows indicate a gradual shift in investor behavior. More speculative capital is beginning to flow into altcoins as Bitcoin’s price action moderates near record highs.
Technical analysis of Fibonacci retracement levels shows similar patterns between the 2018-2021 cycle and the current 2021-2025 period. Both cycles show Bitcoin dominance forming tightening patterns before potential breakdowns that historically precede altcoin rallies.
The altcoin market cap has been building momentum at cycle lows, with technical indicators suggesting a potential breakout phase. Historical patterns indicate these setups often lead to vertical price movements in alternative cryptocurrencies when market conditions align properly.
