investors do not lose faith

In these days of great difficulty in the crypto markets, there are strong doubts about whether a true altcoin season might occur during 2025.

However, these are largely doubts driven more by the (negative) emotion of the moment than by a rational analysis of the medium/long-term trend, so much so that it is not at all possible to rule out that there could be an altseason by the end of the year.

Altcoin season: are there still hopes for crypto investors?

With altcoin season (or altseason), it refers to a period in which the altcoin significantly and consistently outperform the price trend of Bitcoin.

Since an altseason involves a bit all the altcoin, and not some specific ones in particular, indicators are used to understand when one is occurring.

According to the altcoin season index by CMC, a miniature one occurred in the second half of November 2024, after the electoral victory of Trump.

In reality, however, when talking about altseason, it generally does not refer to a short period in which altcoin outperform BTC, but to a prolonged period of at least a month or a month and a half. In fact, altseasons rarely last continuously for more than two months.

So the one in November was more of a mini-altseason than a real altseason like the one in April and May 2021, for example.

The Bitcoin season

The fact is that that same indicator reveals that since the end of February the crypto markets have entered Bitcoin season, which is the opposite of altseason (when Bitcoin outperforms the altcoin).

In general, it is quite normal for the crypto markets to enter Bitcoin season when things go bad, also because BTC is still the benchmark asset of the crypto markets, and a true leader in this sector from a financial perspective.

Given, however, that the Bitcoin season has now lasted for almost a month and a half, many crypto investors and speculators are getting concerned about it.

These concerns today, however, are not supported by strong and concrete clues or signals, also because although the Bitcoin season can last well over two months, they still tend to end sooner or later.

The point is: will the Bitcoin season end before the end of the year? And will there be a new altcoin season?

The forecasts

The forecasts in this regard are made by examining the trend over time of the dominance of Bitcoin.

Yesterday this parameter reached a relative high above 63.8%, a value that hadn’t been seen since January 2021.

To tell the truth, it then reached up to 70% in December 2020, only to slightly decrease in January 2021, and begin to drop sharply precisely in March, when the altseason began.

At this moment the situation appears different, but since November 2022 the dominance of Bitcoin has risen almost constantly from 40% to 63%, a trend reversal seems possible before the end of the year.

Note that now the altcoin are many more compared to what they were at the beginning of 2021, so the current 63% in proportion seems similar to that 70% from which the decline started four years ago.

However, it seems possible that the dominance of Bitcoin will hardly start to decline before the end of April, so much so that some analysts see Bitcoin strong at least until June, from this point of view.

The transition from Bitcoin to altcoin season

It should be emphasized that when the Bitcoin season ends, it does not immediately transition into altcoin season.

The CMC indicator indicates Bitcoin season when its value is equal to or less than 25 points, but indicates altseason when it is equal to or greater than 75 points. So between these two extreme ranges, there is a huge intermediate range where Bitcoin does not significantly outperform the altcoin, and vice versa.

In light of the above forecasts, the circulating hypothesis is that it is unlikely to enter altcoin season before June or July.

However, it remains possible, at least in theory, a altseason before the end of the year.

Kraken’s analysis on the future of the crypto market

In this regard, one can consider the analysis of the Global Economist of Kraken, Thomas Perfumo, regarding the trend of the crypto market.

Perfumo states that the recent decline in the crypto markets reflects a broader risk aversion sentiment that is also affecting the stock markets.

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He says:

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“Now that cryptocurrencies have become a more mainstream investment, correlations with other risky assets tend to increase in the presence of significant macroeconomic changes”.

Furthermore, it highlights how, compared to historical macroeconomic shocks or previous bull and bear market cycles of criptovalute, these declines do not actually represent record losses.

It therefore concludes that it is not at all an exodus from the crypto markets, but a recalibration driven by macroeconomic factors.

Adds:

“This asset class has faced worse crises in the past and, historically, has emerged stronger each time.”

It also highlights how, despite short-term volatility, structural adoption remains strong, so much so that although Bitcoin ETFs have recently recorded net outflows, they have accumulated positive net inflows totaling 1 billion dollars since the beginning of the year.