Altcoins’ roaring returns and falling USDT stablecoin dominance suggest ‘altseason’ is here

The cryptocurrency market exhibits strong signals pointing towards an upcoming altseason, a period of significant altcoin outperformance relative to Bitcoin (BTC). Several key indicators converge to support this prediction, suggesting a potential rally beginning as early as May 2025.

A crucial factor is the declining Bitcoin dominance (BTC.D), which has seen its steepest drop since November 2024, falling 4% in just six days. This downward trend, coupled with a bearish divergence and declining volume (as noted by analyst Michael Van Poppe), strongly suggests a peak in Bitcoin dominance. This capital outflow from Bitcoin is fueling the rise of altcoins, allowing them to gain market share and drive collective price increases.

Further reinforcing this altseason hypothesis is the performance of the TOTAL2 chart, representing the total market capitalization of all cryptocurrencies excluding Bitcoin. Its recent breakout above a downtrend line, present since January 2025, coupled with a bullish break of structure (BOS) on the daily chart and the formation of higher-low patterns, signals a potential decisive uptrend above the $1.25 trillion resistance level. This signifies a clear shift in capital flow from Bitcoin into altcoins.

The weakening Tether (USDT) dominance also contributes to the altseason narrative. USDT dominance has fallen to its lowest level since early February, reaching 4.59% on May 13th. A potential bearish breakout could push it to 2021 lows, mirroring previous altseason levels. This decline further indicates capital rotation towards other assets, including Bitcoin and altcoins.

Indeed, the past seven days have witnessed significant gains for several altcoins, with Ether (ETH), XRP, and Solana (SOL) outpacing Bitcoin’s 10% rise, registering gains of 44.3%, 20.6%, and 22% respectively. Analyst ZERO IKA corroborates this observation, noting that many altcoins have broken above their February and March highs, presenting a potentially early opportunity for recovery, despite still being 70% to 90% below all-time highs.

In summary, the confluence of declining Bitcoin and USDT dominance, coupled with the rising altcoin market capitalization and positive technical indicators, strongly suggests an impending altseason. However, readers should always conduct thorough research and understand the inherent risks before making any investment decisions.