The altcoin market continues to maintain a solid level of 1.50 trillion USD while Bitcoin (BTC) gradually loses its dominant position. The increasing expectations for the Federal Reserve America (Fed) to lower interest rates are running parallel with the capital rotation wave in the crypto market, creating a significant boost for the prospect of an "altcoin season." However, the unexpected decline in interest from institutions towards Bitcoin, coupled with the divided sentiment among investors, may prevent this altcoin season from exploding as expected.
Probability of Fed interest rate cuts surges
According to the FedWatchTool – which aggregates market expectations based on 30-day Fed futures contracts – there is currently a 97.6% chance that the Federal Reserve of America (Fed) will cut interest rates by an additional 25 basis points (bps) at the meeting on September 17. Previously, the Producer Price Index (PPI) last month increased by 0.9%, reflecting the clear impact of the tariffs imposed by President Donald Trump on many major economies, causing domestic prices to rise.
FedWatchTool | Source: CME Soon, America will announce the PPI index for August on September 10, right after the Non-Farm Payroll data and Unemployment Rate are released on Friday. These figures are viewed as key for investors to forecast the Fed's policy stance during the mid-September meeting. If the decision to cut interest rates is approved, this move will not only help curb short-term inflation but may also drive significant capital flows into risky assets like crypto.
Bitcoin falls in dominance, opening the door for altcoin season
The dominance rate of Bitcoin (BTC.D) reflects the market capitalization share that BTC holds in the crypto market. When money flows out of Bitcoin to flow into altcoin, this index declines, thereby opening up opportunities for an altcoin season to explode.
As of Thursday, the dominance rate of Bitcoin has fallen to 58.47%, a significant decrease from the peak of 65.91% recorded on June 26.
At the same time, the crypto market capitalization chart excluding Bitcoin (TOTAL2) is forming a symmetrical triangle pattern on the daily frame. Although TOTAL2 has fallen nearly 1% at the time of writing, the price action still indicates that the upward trend is being maintained in this pattern.
If the crypto market breaks out upward, the scenario of exploring new price levels could completely happen, surpassing the record of 1.69 trillion USD set on August 14th. Conversely, losing the 1.50 trillion USD mark will break the triangle structure and significantly narrow the opportunity to enter the altcoin season.
The Altcoin Season Index from CoinMarketCap is established based on the performance of the top 100 altcoins compared to Bitcoin over the last 30 days. As of Thursday, 53 altcoins have outperformed Bitcoin. However, to be officially considered an "altcoin season," this number needs to reach at least 75 altcoins. This indicates that the altcoin season is only halfway through, amid Bitcoin continuing to gradually lose its dominant position.
Altcoin Season Index | Source: CoinmarketcapAt the same time, the fear and greed index currently stands at 44, reflecting a neutral market sentiment as volatility returns. Typically, only when the bullish sentiment is strong enough are investors willing to shift capital into altcoins.
The crypto fear and greed index | Source: CoinmarketcapIn this context, a decision to cut interest rates by the Fed could become an important catalyst, combined with positive market sentiment and cheaper capital flows for risk assets, opening up opportunities to kick off a potential altcoin season.
This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
Expectations of the Fed cutting interest rates could ignite the altcoin season.
The altcoin market continues to maintain a solid level of 1.50 trillion USD while Bitcoin (BTC) gradually loses its dominant position. The increasing expectations for the Federal Reserve America (Fed) to lower interest rates are running parallel with the capital rotation wave in the crypto market, creating a significant boost for the prospect of an "altcoin season." However, the unexpected decline in interest from institutions towards Bitcoin, coupled with the divided sentiment among investors, may prevent this altcoin season from exploding as expected.
Probability of Fed interest rate cuts surges
According to the FedWatchTool – which aggregates market expectations based on 30-day Fed futures contracts – there is currently a 97.6% chance that the Federal Reserve of America (Fed) will cut interest rates by an additional 25 basis points (bps) at the meeting on September 17. Previously, the Producer Price Index (PPI) last month increased by 0.9%, reflecting the clear impact of the tariffs imposed by President Donald Trump on many major economies, causing domestic prices to rise.
Bitcoin falls in dominance, opening the door for altcoin season
The dominance rate of Bitcoin (BTC.D) reflects the market capitalization share that BTC holds in the crypto market. When money flows out of Bitcoin to flow into altcoin, this index declines, thereby opening up opportunities for an altcoin season to explode.
As of Thursday, the dominance rate of Bitcoin has fallen to 58.47%, a significant decrease from the peak of 65.91% recorded on June 26.
At the same time, the crypto market capitalization chart excluding Bitcoin (TOTAL2) is forming a symmetrical triangle pattern on the daily frame. Although TOTAL2 has fallen nearly 1% at the time of writing, the price action still indicates that the upward trend is being maintained in this pattern.
If the crypto market breaks out upward, the scenario of exploring new price levels could completely happen, surpassing the record of 1.69 trillion USD set on August 14th. Conversely, losing the 1.50 trillion USD mark will break the triangle structure and significantly narrow the opportunity to enter the altcoin season.
The Altcoin Season Index from CoinMarketCap is established based on the performance of the top 100 altcoins compared to Bitcoin over the last 30 days. As of Thursday, 53 altcoins have outperformed Bitcoin. However, to be officially considered an "altcoin season," this number needs to reach at least 75 altcoins. This indicates that the altcoin season is only halfway through, amid Bitcoin continuing to gradually lose its dominant position.
SN_Nour