The cryptocurrency market is currently undergoing a notable transformation, marked by a significant divergence between Bitcoin and the broader altcoin sector. This shift challenges historical market patterns and suggests that the once-anticipated "altcoin season" may be drawing to a close, with Bitcoin increasingly asserting its dominance.
The Shifting Tides: Bitcoin's Ascendant Influence
The 2025 cycle has unveiled a striking departure from historical norms. Traditionally, Bitcoin's post-halving periods have been characterized by powerful rallies, yet 2025 saw BTC close the year down 6%, breaking a long-standing trend. This divergence is mirrored in the altcoin market, where TOTAL3 (market cap excluding BTC and ETH) has posted its fourth consecutive year of underperformance against Bitcoin. This consistent trend underscores Bitcoin's growing market influence. Bitcoin dominance (BTC.D) has remarkably climbed from roughly 40% in 2022 to over 60% by 2025, absorbing nearly 80% of the total new capital that flowed into the crypto market during this period, firmly establishing its position as the primary destination for new investment.
Unpacking the Altcoin Predicament
This current market dynamic stands in stark contrast to the iconic "altcoin season" of 2021. That year, while Bitcoin itself saw a robust 64% rally, TOTAL3 dramatically outperformed it with a staggering 541% surge, clearly signaling a massive rotation of capital into the broader altcoin market. However, a critical change has occurred since then: altcoin funding rates have significantly spiked. This has led to an overabundance of leveraged long positions, effectively trapping altcoins in a volatile loop where even minor sideways movements can trigger cascading liquidations. Combined with Bitcoin's relentless dominance, this amplified volatility makes altcoins exceptionally susceptible to sharp price swings, indicating that the 2021 rally may indeed have been the last genuine "altcoin season."
