Hey everyone!
If you're an altcoin holder like me, you've probably been feeling the pain lately. It's been a tough few months, especially if you bought into altcoins back in December or January. While Bitcoin is nearing its all-time highs, many altcoins have continued to drop. So, what's going on, and when will it be altcoin season? Let's break it down with some simple charts and explanations.
Why Altcoins Are Still Bleeding (and Why We Haven't Seen a Full Altcoin Season Yet)
First off, let's address the elephant in the room: altcoins are still struggling. Even though we saw some smaller "mini" altcoin seasons in December 2023 and January 2024, we haven't experienced anything like the huge altcoin run we saw in 2021. Those mini seasons often got people excited, only to see prices drop again. It's frustrating, right?
One key reason for this is what we call "Bitcoin season." Right now, it's all about Bitcoin. When Bitcoin is doing really well, it tends to pull money away from altcoins.
The Big Picture: Altcoins vs. Bitcoin
Let's look at the "Total 3" chart, which basically shows the entire crypto market without Bitcoin, Ethereum, and stablecoins like USDT. This chart has been a disaster for altcoins since January 2025. Many popular altcoins like Solana, Avalanche, Link, and Render have seen significant drops from their December/January peaks. It's been a continuous slide.
In fact, since the 2021 altcoin season ended, there's been a general downward trend for altcoins compared to Bitcoin. We get some short periods of relief, but the overall trend has been down.
Understanding Bitcoin Dominance
This is a big one. You won't see a major altcoin season if Bitcoin dominance keeps going up. Bitcoin dominance simply means how much of the total crypto market Bitcoin makes up. If Bitcoin's share is growing, altcoins are usually losing ground.
Bitcoin dominance has been on a big upward trend since November 2022. However, we do see some brief dips in Bitcoin dominance, and that's when altcoins tend to do better. For example, in November, December, and January, Bitcoin dominance fell for about three weeks, and that's exactly when we saw those mini altcoin rallies.
Recently, Bitcoin dominance reached around 66%, which is a key level according to some chart analysis (called Fibonacci levels). Historically, when Bitcoin dominance hits these levels, it tends to pause or pull back a bit. So, there's a chance we could see a short-term bounce for altcoins in July if Bitcoin dominance takes a breather around this level. But don't expect a full-blown altcoin season just yet.
The Role of the Fed and Global Money Flow
Another crucial factor is what the Federal Reserve (the Fed) is doing with interest rates. When the Fed makes it harder for money to flow freely in the global economy, it's generally not good for riskier assets like altcoins.
The next big Fed meeting is at the end of July. Most experts don't expect the Fed to cut interest rates anytime soon. In fact, recent inflation data (the PCE inflation) showed a slight increase, which means the Fed might not be in a hurry to lower rates. This lack of "global liquidity" (easy money) means altcoins could continue to face pressure.
Historically, major altcoin rallies have happened when the Fed ended "quantitative tightening" (basically, when they stopped pulling money out of the economy) and when interest rates were lower. Until we see a clear shift in the Fed's approach, it's tough for altcoins to really take off.
Looking at Individual Altcoins Against Bitcoin
When you compare individual altcoins to Bitcoin, the picture becomes even clearer.
Ethereum vs. Bitcoin (ETH/BTC): Ethereum seems to have found a temporary bottom against Bitcoin. This looks a bit more promising than other altcoins, but it's still not a strong upward trend.
Solana vs. Bitcoin (SOL/BTC): Solana is still on a clear downward trend against Bitcoin. It's hard to see a bottom here right now.
Render vs. Bitcoin (RNDR/BTC), Link vs. Bitcoin (LINK/BTC): These charts are even more telling. Render and Link have fallen significantly against Bitcoin, almost back to their bear market lows. They're showing very little strength.
Avalanche vs. Bitcoin (AVAX/BTC): This one is also continuing to go down, potentially heading back to its lows from before the 2021 altcoin season.
These charts all suggest that Bitcoin is still the preferred asset, and investors aren't yet rushing into altcoins.
What to Expect (and Not Expect)
So, was June the bottom for altcoins? Looking at the charts and the broader economic picture, it's tough to say definitively that it was the absolute bottom. While July *could* see some short-term relief if Bitcoin dominance pulls back, a sustained altcoin season is likely still a way off.
Many of us probably bought altcoins too early, thinking the big season was around the corner. While there's always money to be made with short-term trades or specific "narratives" (like AI coins in December/January), simply holding a wide range of altcoins has been a losing strategy lately.
I'm still holding my altcoins and even buying a bit here and there (not financial advice!), but I'm not in a huge hurry. I understand there might be more downside. A true altcoin season will likely need a few key things to happen:
A clear shift from "Bitcoin season" to "altcoin season."
The Fed cutting interest rates.
The Fed ending quantitative tightening.
Improved global money flow.
These factors are much more powerful than simply hoping altcoins will turn around on their own. We're confident an altcoin season will come, but it's a matter of when, not if.