XRP, DOGE, SOL Crash Hard—But Here’s Why Altcoin Season Isn’t Dead Yet
Crypto markets got sucker-punched this week—XRP, Dogecoin, and Solana led the bloodbath with double-digit drops. Yet traders whisper: this might just be the storm before the altcoin renaissance.
When Bitcoin sneezes, altcoins catch pneumonia. But here’s the twist: historical patterns suggest these selloffs often precede violent rebounds. Liquidity floods back into riskier plays once BTC stabilizes—and this cycle’s no exception.
Key levels to watch? If majors like ETH hold their 200-day moving averages, capital could rotate back into alts faster than a hedge fund dumping bags on retail. The trigger? Either ETF approvals or another round of 'institutional' FOMO (read: late-money panic).
So is it doom or boom? Depends who’s holding the leverage. Just remember—in crypto, ‘seasonal’ trends last until they don’t. And Wall Street’s still trying to short pajama traders.
When altcoin season?
The sharp sell-off of the past few days came after weeks heavy capital rotation into smaller tokens, fueling talks of a full-blown altcoin season. That period, sometimes dubbed alt season, occurs when riskier, smaller tokens outperform bitcoin, the leading crypto, for a sustained period.
CoinGlass' Alcoin Season Index, which measures the altcoin market's outperformance versus BTC on a scale of 0 to 100, cooled off to 41 on Friday from Monday's 59, the strongest reading since the late January speculative frenzy around President Trump's inauguration.
Still, the total altcoin market (except stablecoins) saw a rapid appreciation, nearly doubling in value since April, David Duong, head of research at Coinbase, said in a Friday report.
For this week's pullback, traders taking on excessive leverage on altcoin bets were to blame, the report pointed out.
The Altcoin Open-Interest Dominance metric, which compares the amount of dollars tied up in altcoin derivatives contracts to bitcoin's, soared to 1.6, a level that has preceded previous market shake-outs, the report noted. A decrease in the ratio WOULD suggest a healthy leverage reset for the altcoin market, otherwise more shakeouts are expected, Duong wrote.
For an extended altcoin season, investors should keep an eye on the Bitcoin Dominance, which measures BTC's share of the total crypto market capitalization. The metric has broken below the 200-day moving average for the first time since a brief period in January 2025, the report noted.
"A sustained MOVE under the 200-DMA could validate the 'alt season' narrative and have historically preceded multi-week stretches of altcoin outperformance (like in 2021)," Duong wrote.
However, traders might be better off waiting for more consecutive sessions closing below the level before piling into altcoin bets for a more "prudent positioning," he added.
