Bitcoin Dominance Drops to 63%: Is Altcoin Season Imminent?

The cryptocurrency market is buzzing with speculation about an impending altcoin season, a phase where alternative cryptocurrencies outshine Bitcoin (BTC). A declining Bitcoin market dominance and surging stablecoin supply suggest that investor focus may be shifting toward altcoins, reigniting discussions about a potential market rotation. However, industry experts offer contrasting views on whether these signals herald a true altcoin season or a temporary fluctuation.

Market Signals: Bitcoin Dominance and Stablecoin Surge

A key indicator of a potential altcoin season is the decline in Bitcoin’s market dominance, which reflects its share of the total crypto market capitalization. A drop in dominance, coupled with rising stablecoin supply, often signals that capital is flowing from Bitcoin and stable assets into riskier altcoins. As of May 19, 2025, Bitcoin’s dominance has fallen to 63%, down from 64.4% earlier this month, according to CoinMarketCap.

Source: CoinMarketCap

This decline coincides with a notable expansion in the altcoin market, with the total market capitalization of altcoins rising from $954.76 billion to $1.15 trillion over the past month, peaking at $1.26 trillion on May 14, according to TradingView.

Source: TradingView

Stablecoin dynamics further support this narrative. CoinMarketCap data shows Tether (USDT), the leading stablecoin, reaching an all-time high market cap of $151.35 billion, while USD Coin (USDC) hit $60.64 billion. This influx of liquidity into the market is often a precursor to an altcoin season.

The CoinMarketCap Altcoin Season Index, which tracks the performance of the top 100 altcoins against Bitcoin, has also risen, climbing from 12 in late April to a peak of 31 on May 14 before settling at 25 on May 19. If Bitcoin’s dominance continues to decline, the market may be poised to usher in an altcoin season.

Source: CoinMarketCap

Ethereum’s Rally and Community Sentiment

Ethereum (ETH) has been a catalyst for altcoin optimism, surging nearly 40% in a week to above $2,500, driven by anticipation for the Pectra upgrade, which aims to enhance scalability and efficiency. Other altcoins, such as Solana (SOL), Sui (SUI), and Dogecoin (DOGE), have also posted gains exceeding 15% in early May, reinforcing the altcoin season narrative. While the broad rally in altcoin prices has sparked enthusiasm about a potential altcoin season, the cooling of prices following the positive momentum from Ethereum’s Pectra upgrade suggests this may be a short-lived speculative surge. The market has yet to confirm the arrival of a true altcoin season.

Expert Perspectives: Contrasting Views on Altcoin Season Timing

Zach Pandl, Grayscale’s Head of Research, argued in an interview with Decrypt that Bitcoin’s dominance is likely to stabilize between 60% and 70%, casting doubt on an immediate altcoin season.

Pandl’s perspective is grounded in historical market cycles, where Bitcoin’s dominance typically peaks during early bull runs as institutional and retail investors prioritize it as a “safe” crypto asset. In past cycles, such as 2017 and 2021, dominance often declined after Bitcoin reached a price peak, as traders shifted capital to altcoins higher on the risk curve seeking greater returns. However, Pandl notes that the current cycle differs due to sustained institutional demand for Bitcoin, driven by $5.85 billion in spot Bitcoin ETF inflows since January 2025, calculated based on data from Glassnode. He argues that this inflow, coupled with Bitcoin’s role as a macro hedge amid geopolitical uncertainties, could prevent a sharp dominance drop. Unlike previous cycles, Bitcoin’s dominance is supported by structural demand, making a rapid shift to altcoins less likely without a major catalyst like regulatory clarity for DeFi. “When markets are focused on macroeconomic instability and risks to the U.S. dollar, Bitcoin’s dominance will likely rise,” Pandl told Decrypt. “When markets are focused on all the applications of blockchain technology and the innovation happening in crypto, Bitcoin’s dominance will fall.” He suggests that altcoin outperformance may occur gradually, particularly in projects with strong fundamentals, rather than a broad altcoin season.

Arthur Hayes, former BitMEX CEO, takes a more bullish stance on altcoins but ties their success to Bitcoin’s price trajectory. In an interview with Fortune, Hayes predicts that Bitcoin must first break through $110,000 and climb toward $150,000–$200,000—potentially by summer or early Q3 2025—before significant capital rotates into altcoins.

His logic is based on the cyclical nature of crypto markets, where Bitcoin’s parabolic rallies often attract initial capital, creating wealth effects that encourage investors to chase higher-risk, higher-reward altcoins. Hayes points to Ethereum’s recent 40% surge as a leading indicator, noting that layer-1 protocols and meme coins typically benefit most during altcoin seasons due to speculative fervor. He also highlights the role of stablecoin inflows, such as the recent $6 billion USDT injection, as a precursor to capital rotation. According to Hayes, when Bitcoin hits a new all-time high, retail and institutional investors will start hunting for 10x returns, and that’s when altcoins season come. He cites the 2017 altcoin season, where Ethereum and smaller projects like Ripple surged after Bitcoin’s $20,000 peak, as a historical parallel.

Hayes, however, predicts that the 2025 altcoin season will not match the scale of 2021, when major altcoins soared, some achieving gains exceeding 100x. He anticipates that the onset of an altcoin season will be driven by a new narrative capturing investor interest, potentially leading to significant price surges for related altcoins. Hayes also notes that many older altcoins—particularly those with high fully diluted valuations (FDV), limited circulating supply, and low demand—are unlikely to rebound significantly in the upcoming season.

What’s Next for Altcoins?

Despite their differing conclusions, both experts underscore the importance of technological innovation and compelling narratives in driving an altcoin season. They also agree on a key point: while an altcoin season may eventually materialize, a widespread rally across all altcoins is unlikely. Projects tied to new technologies or narratives may attract significant attention and price appreciation, but outdated tokens lacking demand or narrative support face a less promising outlook.

In summary, the crypto market remains dominated by Bitcoin, with the timing and scale of an altcoin season still uncertain. Traders seeking clarity on whether an altcoin season will emerge should closely monitor on-chain data, market sentiment, and technical indicators. Additionally, staying attuned to the latest industry developments can help identify emerging narrative-driven opportunities.