Bitcoin dominance has slipped to its lowest level in six months, while altcoin market capitalization has jumped over 50% since July, setting the stage for a possible full-scale altcoin season in September, according to Coinbase.
David Duong, Coinbase Institutional’s global head of research, wrote in the firm’s monthly outlook that current market conditions “suggest a potential shift towards a full-scale altcoin season.” Coinbase defines such a season as a period when at least 75% of the top 50 altcoins outperform Bitcoin over the previous 90 days.
While altcoin season indexes haven’t reached the 75 level Coinbase uses as the threshold, they are trending higher:
- CoinMarketCap’s Altcoin Season Index: 44 (up from below 25 in July)
- Blockchain Center’s Index: 53 (neutral)
- CryptoRank’s Index: 50
The total altcoin market cap’s recent surge suggests institutional interest in Ethereum and strong activity in digital asset treasuries and stablecoin-related projects.
Duong highlighted that a large amount of retail capital is still sitting in money market funds, waiting for a catalyst. With U.S. inflation steady at 2.7% in July and a 92% probability of a Federal Reserve rate cut in September, a lower interest rate environment could draw fresh money into crypto — particularly into higher-risk altcoins.
Bitcoin’s market dominance has fallen from over 65% in May to around 59% in August, its lowest since late January. Duong called this a “signal of early-stage capital rotation” into altcoins.
Crypto trader Ito Shimotsuma noted that Bitcoin’s first monthly bearish dominance cross since January 2021 has appeared — a pattern that last time preceded a four-month altcoin rally.
What’s Needed for a Full Altcoin Season
According to BITX , three factors must align:
- Supportive macro backdrop
- Declining Bitcoin dominance
- A compelling new market narrative
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.