Bitcoin Dominance Faces Rejection as Altcoins Gain Traction

In the early days of May 2025, the Bitcoin price surged above the $96,000 mark, triggering a significant upswing in altcoins. This phenomenon is often referred to as an Altseason, where 75% of the top 100 cryptocurrencies outperform Bitcoin over a period. This trend is typically accompanied by an increase in Altcoin dominance and a decrease in Bitcoin dominance. However, the current Altcoin Season Index chart indicates that the Altseason may not be imminent, as the index remains below 20, suggesting Bitcoin's continued dominance.

The altcoin market cap appears to be gaining traction, but the Altcoin Season Index continues to decline. This suggests that Bitcoin maintains a significant level of dominance, with liquidity primarily flowing into Bitcoin rather than other altcoins. Over the past 90 days, only a few altcoins such as SYRUP, HYPE, and VIRTUAL have recorded triple-digit gains, while many popular altcoins remain under bearish pressure.

Stablecoins like USDT and USDC are among the largest traded tokens after Bitcoin and Ethereum. Their dominance in the market provides insights into investor sentiment regarding whether they are favoring Bitcoin or altcoins. Interestingly, the combined dominance of Bitcoin, USDT, USDC, and DAI shows a pattern similar to that observed during previous Altseasons. A popular analyst, Moustache, has noted that the combined dominance of these tokens has triggered a bearish divergence after reaching a particular resistance level. This pattern has occurred before the start of previous Altseasons, leading the analyst to believe that Altseason 2025 may be on the horizon.

While Bitcoin has been making significant moves, tokens within the top 10 have not followed the trend. However, other altcoins, particularly memecoins, AI, RWA, and DeFi tokens, have been gaining attention. In recent days, the SEI price has risen with over 40% gains, and tokens like JasmyCoin, SPX6900, dogwifhat, Virtuals Protocol, Jupiter, and Sonic have seen gains exceeding 20%. Many other tokens continue to show double-digit gains, indicating a rising dominance of altcoins. Meanwhile, Bitcoin dominance faces rejection at the highs of 65.95% and could be heading towards local support at around 64.69%. These levels are crucial for determining the next course of action, as a rebound could delay the Altseason, while a bearish continuation could revive hopes for an Altseason.