Analysts Identify 3 Indicators That Could Signal an Altcoin Season in 2026

Crypto Markets and Altcoin Season 2026

Crypto markets ended 2025 in negative territory as most major assets failed to recover from a fourth-quarter correction according to analysis. Analysts are now identifying potential signals that may indicate the onset of an altcoin season in 2026. These include bullish divergences on weekly charts and growing dominance metrics for altcoins outside the top 10 by market capitalization as reported.

Market participants are paying attention to the formation of bullish divergences, particularly in altcoins like Optimism, Arbitrum, and Avalanche. The phenomenon occurs when price lows continue to fall, but the RSI indicator begins forming higher lows, signaling weakening bearish momentum. Analysts argue this is a strong sign of a potential trend reversal in altcoin markets.

The Others.D index, which tracks the combined market dominance of altcoins outside the top 10, is near a breakout from a multi-year falling wedge pattern. This is viewed as a bullish development by technical analysts. Current levels of Others.D sit at 6.88%, with a potential target of 13.77% if the pattern plays out.

Why Are Analysts Watching Altcoin Dominance Patterns?

Historically, altcoin dominance has shown strong correlations with broader market rotations. A similar pattern was observed in 2021 and 2022, preceding significant rallies in altcoin prices. The Others.D index has long been considered a proxy for broader altcoin strength.

Bitcoin dominance has also come under scrutiny as a potential indicator. It has recently been rejected from a multi-year trendline, mirroring a similar move in 2021. This rejection could signal a shift in capital flow from Bitcoin to altcoins.

What Do Volume Metrics Reveal About Altcoin Activity?

Centralized exchange volume data suggests that altcoin trading activity is unusually high despite weak price action. On-chain analyst CW8900 noted that altcoin volume (excluding top five cryptocurrencies) is significantly higher than in previous cycles. This indicates increased interest from institutional and whale investors who are likely positioning for a potential bull market.

Ethereum has also shown signs of outperformance compared to Bitcoin. Ethereum’s dominance increased from 7.3% in May 2025 to nearly 12% by December 2025. This shift suggests that investors are beginning to allocate capital away from Bitcoin as reported.

How Do Analysts View the Outlook for Altcoin Season 2026?

Market observers are drawing parallels between current conditions and past altcoin cycle bottoms. In 2018 and 2022, altcoin dominance reached low points before significant capital rotations into alternative cryptocurrencies. A similar setup is now emerging, with technical indicators like MACD and golden cross formations suggesting a potential upward shift.

Analysts project that if the current pattern continues, altcoin dominance could reach 25% or higher by 2026. This would mark the strongest shift since 2017 and could lead to significant returns for large-cap alts and mid-cap projects.

What Are the Risks and Limitations of These Indicators?

Despite the bullish signals, skepticism remains widespread among investors. Crypto Twitter has expressed low expectations for a broad altcoin rally on the scale of previous cycles. Bitget CEO Gracy Chen has publicly stated that an altcoin season is unlikely to emerge in 2025 or 2026.

Bitcoin’s performance remains a key variable. If Bitcoin continues to trade in a range or declines sharply, it could undermine confidence in altcoin markets. On the other hand, if Bitcoin stabilizes between $80,000 and $90,000, it may provide the necessary conditions for altcoin support to continue building as suggested by analysts.

What Do Portfolio Managers Recommend for 2026?

Portfolio managers are advising investors to maintain a disciplined approach. While altcoin season could offer attractive returns, it is also associated with higher risk. Many recommend keeping only 5–10% of a portfolio in high-risk alts while maintaining a stronger base in Bitcoin and Ethereum as recommended.

The market is currently in a transitional phase, and investors are advised to monitor macroeconomic developments, particularly related to U.S. Federal Reserve policy. A potential end to quantitative tightening could bring fresh liquidity into the system, similar to what occurred in 2020.

Market observers agree that the early signs of an altcoin season are emerging, but outcomes remain uncertain. The next few months will be critical in determining whether these signals translate into sustained price momentum or remain theoretical patterns without follow-through according to analysts.