Altcoin Season on Hold: Is 2025 the Year for Crypto's Underdogs?

The crypto market is today buzzing with bullish anticipation, but the long-predicted altcoin season isn’t happening quite yet. A lot of people were expecting 2024 to be the year of altcoins. There are signs that it will be pushed back, putting it more in-line with 2025. This delay isn’t without precedent, as historical data shows a clear pattern in altcoin rallies after Bitcoin makes a move.

Are market conditions about to turn where we finally see an altcoin breakthrough? Or is it going to take even longer?

Historical Trends and Market Indicators

Altcoin seasons usually happen in the last year of Bitcoin’s four-year cycle—in particular, right after Bitcoin has finished its parabolic ascent. Altcoin seasons developed in 2017 and 2021. These periods began immediately following Bitcoin’s latest all-time high and subsequent consolidation. However, these periods are marked by lots of capital flowing into altcoins, creating insane returns even in down crypto markets.

Ethereum, the second-largest cryptocurrency by market cap, has been known to historically lead altcoins higher. But Ethereum’s ratio vs. Bitcoin is still sitting close to multi-year lows, indicating an ongoing headwind to any altcoin rallies. What this means as it pertains to altcoins is that for them to really have their moment, Ethereum has to show strength against Bitcoin.

The first, indicated by Bitcoin’s dominance (which has been mostly around 60% in 2024-2025) of altcoin performance. When Bitcoin dominance is high it means that the majority of capital is flowing into Bitcoin. This new concentration doesn’t leave much room for altcoins to succeed.

Liquidity and Funding Challenges

Even today, the crypto market is flooded with over 15,000 altcoins, producing an extremely fragmented altcoin landscape. While the altcoin market grows faster than ever, liquidity is unable to catch up with that growth. This imbalance causes short order books and increased volatility. This creates an enormous liquidity risk for investors hoping to take either buy-side or sell-side positions without moving the underlying index dramatically.

As a result, venture capital funding for crypto projects has dropped through the floor. It dropped from $29.4 billion in 2022 to a mere $7.1 billion in 2024. This funding fibonacci has produced a deep fiscal drought for most altcoin developer war chests, crippling their capacity for this innovation arms race they’ve entered into.

With new altcoin projects launching on a daily basis, this further fragments the total capital pool. This creates a difficult environment for individual altcoins to draw enough investment and build momentum in the market.

Social Sentiment and Future Outlook

Social sentiment for altcoins is at an all-time low, with indicators like the Altcoin Frenzy index monitoring altcoin mania across crypto social media platforms revealing zero freaking outness. This is an indication that retail investors, the lifeblood of most significant altcoin rallies, have not fully entered the market.

Looking forward, altcoin season’s fate maybe be dependent on Bitcoin’s continuation and performance of a bull run. Once Bitcoin stabilizes above $100,000, capital will start to flow into altcoins as investors look for the riskier, higher-return investments.

"Why buy the meme when BTC is up 150% this year?" - a trader

Looking ahead, the fate of altcoin season may hinge on Bitcoin's performance. If Bitcoin stabilizes above $100,000, capital may eventually flow into altcoins as investors seek higher-risk, higher-reward opportunities.