Key Insights
- Bitcoin’s dominance has dropped from 65% to under 58%. This shows an ongoing state of capital rotation within the market.
- Despite market pullbacks, altcoins like Ethereum, Lido, and Chainlink are showing substantial gains.
- Analysts expect the next altcoin to be more utility-driven and to start in September.
Altcoin season has become one of the main talking points in the crypto space. This is mainly because Bitcoin's dominance is now in freefall. Bitcoin spent months leading the charge, and alternative currencies now show signs of life.
Altcoins are gaining traction, and institutions are preparing for new opportunities. Traders are gearing up for a new wave that could arrive this September.
Ethereum Leads the Altcoin Season Revival as Institutional Confidence Surges
Ethereum is at the center of the Altcoin Season talk. At the time of writing, institutional investors now hold more than 3 million ETH collectively. This proves without a doubt that institutions are betting more and more on the future of cryptocurrency.
Popular Ethereum-based projects like Arbitrum (ARB), Optimism (OP), and Ethena (ENA) have also been seeing higher activity recently.
One of the bigger standouts has been Lido, the leader in liquid staking. The cryptocurrency price jumped nearly 60% this month.
The SEC hinted that staking may not be subject to securities rules. That change has boosted investors' confidence, who now see Ethereum and other related tokens as safer bets.
Why Google Trends Showed a Short-Lived Altcoin Hype
There was a spike in Interest in altcoins on Google Trends in August. Searches for the word “altcoin” hit an all-time high before collapsing again within a week. Internationally, the score for this search term jumped as high as 100, before collapsing to 16.
This rise and fall has been one of the significant reasons why analysts are debating whether the altcoin season has already ended. The market reacted to this news.
With this, the total altcoin market cap rose from $1 trillion to $1.1 trillion, before falling again. Some analysts believe that the spike could be a positive indicator. According to renowned analyst Cyclop on X, “altcoin” is now mainstream.
The analyst argued that, unlike 2021, when most people just said “crypto,” investors are now more savvy. Also, they use the appropriate terms to distinguish Ethereum and everything else from Bitcoin.
The Fragmented Altcoin Season in August
Not all altcoins performed the same in August, though. For example, data from Artemis shows that only a few categories performed well. Ethereum expectedly led the charge with its steady institutional accumulation.
Exchange tokens like BNB and OKB followed this trend. This rallied on token burns and exchange growth. Oracles like Chainlink also performed well after its Reserve plan pushed demand higher.
However, the same didn’t hold for other categories, which failed to gain strength and fragmented the altcoin market. This pattern means that the future altcoin seasons are unlikely to see the market move as a whole.
Instead, certain market parts are expected to perform better than others, with the utility altcoins being the strongest candidates.
Could September Be The Start of The Real Altcoin Season?
When writing, the debate remains whether the recent altcoin activity is the start of a major rally or just noise. While August showed fragmentation regarding movement, September could bring more clarity to the market.
Institutions like Coinbase and Pantera Capital expect altcoins to benefit, especially as Bitcoin’s dominance worsens. Ethereum's layer-2 ecosystem and oracle tokens are already leading the way. If more categories join, the altcoin season could finally meet expectations.
For now, the market is watching what happens next with Bitcoin. A drop further down may be the green light for the altcoin market to surge.
