- Altcoin season flashed upside momentum build-up as BTC dominance dipped.
- It was still BTC season per altcoin season index reading, but this could change.
The risk-on sentiment in May has significantly boosted the altcoin market, especially after Bitcoin [BTC] surged above $100K last week.
Looking ahead, the building momentum may be a signal of an incoming first phase of the altcoin season, noted analytics firm Swissblock.
“First leg of Altseason incoming. Last time we got this confirmation was February and November of 2024.”
Source: Swissblock
The attached chart shows an uptick in positive altcoin impulse (blue), a trend flashed in both February and November 2024 altcoin run-ups.
Altcoin momentum improves
Crypto analyst Benjamin Cowen echoed Swissblock’s outlook.
Cowen noted that, from a price chart perspective, there was an increasing number of altcoins above the 100-day Simple Moving Average (SMA).
Source: X
AMBCrypto checked key altcoin season indicators to gauge the budding traction.
Bitcoin dominance (BTC.D) hit a cycle high of 65.3% in early May, slowing the broader altcoin sector’s April recovery.
However, last week’s BTC jump above $100K was also marked by a sharp 4% drop in BTC dominance to 62%.
Source: TradingView (Altcoin market performance vs. BTC, USDT dominance)
Besides, Tether’s USDT dominance (USDT, orange) has declined from 6% to 4.5% in the past three weeks. This meant that the altcoin sector saw some capital rotation from BTC.
This was confirmed by a rebound in altcoin market cap (purple), excluding BTC and Ethereum [ETH], from over $600 billion to over $900 billion.
For context, last November’s altcoin pump was marked by similar signals – a sharp drop in BTC and USDT dominance. Simply put, the Swissblock outlook may be validated if the trend repeats.
That said, it was still a firm BTC season as of the time of writing, per the Altcoin Season Index (ASI) reading of 27.
Notably, the ASI is a lagging indicator. It tracks BTC’s performance against altcoins over the past 90 days.
Despite this, Monero [XMR], Sui [SUI], Bittensor [TAO], and Tron [TRX] have outperformed BTC in the same period.
Since April, altcoin season momentum has increased. However, not all altcoins will perform equally. Focusing on sub-sector leaders with strong fundamentals could improve positioning.
