While bitcoin (BTC) experienced only a modest decline, other major cryptocurrencies saw significant drops over the past few days, raising concerns about the sustainability of the so-called altcoin season.
XRP, dogecoin (DOGE), and Solana’s SOL were among the hardest hit in the top 10 cryptocurrencies on Friday, each falling by approximately 5% within the last 24 hours, according to RialCenter data. From Wednesday’s highs, XRP and DOGE plummeted around 18%, while SOL dropped 12% in the same period. The RialCenter 80 Index, which tracks mid-cap tokens outside of the primary 20, saw a 10% decline from its weekly peak.
Meanwhile, BTC was trading at around $116,000, slightly over 3% down from its mid-week high of $120,000. Ethereum’s ether (ETH) was 4% below its weekly high, buoyed by consistent accumulation by crypto treasury strategy firms.
When does altcoin season begin?
The sharp sell-off in recent days followed a period of heavy capital rotation into smaller tokens, sparking discussions of a potential altcoin season. This phase, sometimes referred to as alt season, occurs when riskier, smaller tokens steadily outperform bitcoin, the leading cryptocurrency.
The Altcoin Season Index, measuring the performance of the altcoin market against BTC on a scale of 0 to 100, dropped to 41 on Friday from Monday’s 59, the highest reading since the speculative excitement around President Trump’s inauguration in late January.
Nonetheless, the overall altcoin market (excluding stablecoins) has nearly doubled in value since April, according to David Duong, head of research at Coinbase, in a Friday report.
This week’s pullback was attributed to traders employing excessive leverage on altcoin investments, the report indicated.
The Altcoin Open-Interest Dominance metric, which compares the funds invested in altcoin derivatives to those tied up in bitcoin, surged to 1.6, a level that has historically signaled prior market corrections. A reduction in this ratio would indicate a healthy reset for altcoin leverage; otherwise, further shakeouts could be anticipated, Duong suggested.
For a more extended altcoin season, investors should monitor Bitcoin Dominance, which reflects BTC’s share of the total cryptocurrency market capitalization. This metric has fallen below the 200-day moving average for the first time since a brief period in January 2025, as noted in the report.
“A sustained move below the 200-DMA could reinforce the alt season narrative and has historically preceded extended periods of altcoin outperformance (similar to 2021),” Duong added.
However, it may be wise for traders to wait for more consecutive sessions closing below this level before committing to altcoin investments for a more cautious approach, he concluded.
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