Ethereum News Today: Altcoin Season Gaining Momentum as Bitcoin Dominance Falls to 59%

The cryptocurrency market is displaying early indicators of a potential altcoin season, according to Coinbase Institutional, as several key metrics suggest a shift in investor focus from Bitcoin to alternative digital assets. The firm has noted a decline in Bitcoin’s market dominance, rising altcoin capitalization, and growing institutional interest in Ethereum as potential precursors to a broader rally in smaller-cap cryptocurrencies [1].

Bitcoin’s dominance has dropped from over 65% in May to approximately 59%, its lowest level since January, a trend that Coinbase views as a sign of capital rotation into altcoins [1]. The drop coincided with the first monthly bearish cross in Bitcoin dominance since January 2021. Historically, such a signal has led to a four-month rally in altcoins, and a similar outcome could occur through December 2025. Meanwhile, altcoin market capitalization has risen by over 50% since early July, and altcoin season indexes from CoinMarketCap, Blockchain Center, and CryptoRank are gradually inching upward, though they have not yet crossed the 75% threshold typically associated with a full altcoin cycle [1].

Ethereum is currently leading the charge. U.S. spot Ethereum ETFs have attracted more than $3 billion in net inflows during the first half of August, with over $1 billion in a single day. This week alone, ETH prices surged nearly 20%, reaching an annual high of $4,765. The strong demand has pushed total net assets across all spot ETH ETFs to a record $29.22 billion. The momentum is being driven by a combination of stablecoin adoption and institutional interest in digital asset treasuries, with several companies having added over two million ETH to their holdings since early June [1].

Coinbase Institutional’s global head of research, David Duong, noted that an altcoin season is defined by a period in which at least 75% of the top 50 altcoins by market capitalization outperform Bitcoin over 90 days. While this threshold has not yet been reached, current conditions suggest the market is trending in that direction. A key catalyst is the anticipated Federal Reserve rate cut, with odds now at 92% following recent inflation data. Lower interest rates are expected to draw more retail and institutional capital into high-risk assets like altcoins, further supporting the case for an altcoin rally [1].

Institutional demand and derivatives positioning also point to a more favorable environment for altcoins. Open interest in altcoin futures has risen, indicating a willingness to take larger positions in non-Bitcoin assets. Liquidity metrics, including trading volumes, order book depth, and stablecoin issuance, have also shown improvement, suggesting greater participation from both market makers and long-term investors [1].

Although a strong narrative has yet to emerge to fully ignite the altcoin season—similar to past cycles driven by ICOs, Layer-1 blockchains, and DeFi/NFTs—analysts remain optimistic that one could develop in the coming months. Fundstrat’s chief information officer has labeled Ethereum as the “biggest macro trade” of the next decade, while another analyst forecasts ETH could reach between $12,000 and $15,000 by 2025 [1].

If current trends continue into September, the market may be on the brink of its most significant altcoin season since 2021. Unlike previous cycles, this one could be more institutionally driven, signaling a shift in the market’s underlying structure and dynamics [2].

Sources:

[1] Coinbase Flags Early Signs of Altcoin Season (https://cryptodnes.bg/en/coinbase-flags-early-signs-of-altcoin-season/)

[2] Coinbase Signals Altseason Season Ahead as ETH Gains (https://www.ccn.com/news/crypto/coinbase-altseason-prediction-september/)