Is Altcoin Season Over? Why Bitcoin is Still the King of Crypto Markets

Altcoin Season on Hold: Will Bitcoin’s Power Surge or Fall?

Altcoin Season – The CoinMarketCap Altcoin Season Index has dropped below 40, signaling a continued underperformance of altcoins relative to Bitcoin (BTC). As of February 17, the index stands at 36, suggesting that Bitcoin is currently leading the market. Despite significant volatility, Bitcoin has demonstrated remarkable strength, staying above $96,000, which could set the direction for the broader market in the upcoming weeks. But what’s driving this shift, and what can we expect for altcoins moving forward?

What is the CoinMarketCap Altcoin Season Index?

The CMC Altcoin Season Index is a key market tool used to track the relative performance of the top 100 cryptocurrencies over the past 90 days. When 75% or more of these altcoins outperform Bitcoin, the market is considered to be in an “altcoin season.” In December 2024, the index hit 64, signaling the start of a new altcoin season. However, since January 2025, the index has remained just above 40, and now, with the latest readings at 36, altcoins are clearly trailing behind Bitcoin.

This drop in the index signals that, despite a bullish overall tone in the market, Bitcoin’s dominance remains intact. Historically, Bitcoin tends to consolidate or even decline before the next altcoin rally begins, which suggests that altcoins may not see a major uptick until Bitcoin experiences more stability or a drop in price.

The Role of Bitcoin in Altcoin Season

As the dominant cryptocurrency, Bitcoin tends to lead the market, and its price fluctuations have a significant impact on altcoin prices. The performance of Bitcoin has been incredibly robust, staying above the $96,000 mark, indicating strong demand. However, Maartunn, an analyst at CryptoQuant, cautions that the market could still face some resistance before a breakout occurs, pointing to the Inter-exchange Flow Pulse (IFP) indicator, which currently signals a bearish trend.

The IFP tracks Bitcoin’s movement between derivatives and spot markets. Typically, a rise in flows into derivatives is seen as a bullish signal, but the current downturn indicates that Bitcoin might face a period of consolidation before seeing any significant upward momentum. This could delay the onset of a new altcoin season and further prolong the dominance of Bitcoin in the market.

The Impact of New Token Launches on Altcoins

Another factor affecting altcoins is the sheer number of new tokens flooding the market. In January 2025, over 600,000 new tokens were launched, according to Bobby Ong, co-founder of CoinGecko. The influx of new tokens has spread liquidity thin, which in turn has hurt the performance of many altcoins. Investors are actively shifting their investments between numerous tokens, which is limiting the capital available for established altcoins, resulting in lower price performance across the board.

Some of the best-performing altcoins over the past 90 days have been Hyperliquid (HYPE) and Ripple (XRP), rising 735% and 143%, respectively. However, many altcoins tied to emerging trends, such as Artificial Intelligence (AI), have suffered significant losses. Tokens like RENDER (RNDR), Artificial Superintelligence Alliance (FET), and Near Protocol (NEAR) are all down more than 40% over the same period.

Market Sentiment and the Road Ahead for Altcoins

Looking ahead, the performance of altcoins will depend largely on several key factors. Macroeconomic conditions, such as interest rates and inflation, will have a significant impact on investor behavior, as will any regulatory developments surrounding cryptocurrency markets. The broader market conditions, including the direction of Bitcoin and investor sentiment toward altcoins, will also play a crucial role in determining the next leg of growth for altcoins.

Despite the current lackluster performance, historical trends indicate that altcoin seasons typically follow periods of consolidation or decline in Bitcoin’s price. As such, once Bitcoin stabilizes or declines, altcoins may find their moment to rise again. But until that happens, altcoins are likely to continue underperforming relative to Bitcoin, especially given the increasing number of new tokens entering the market.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.