Altcoins are surging, but indicators are cooling... "Not altcoin season" warning

▲ Altcoin/AI generated image

Some large altcoins have surged over the past week, reviving hopes for an altcoin season in the market. However, with Bitcoin (BTC) dominance hovering around 61% and the altcoin season index falling significantly short of the baseline, analysis suggests that this is closer to selective rotation focused on certain assets rather than a broad market rally.

According to BeInCrypto on May 7 (local time), several altcoins showed significant gains over the past week. Among the top 100 cryptocurrencies by market capitalization, Toncoin (TON) showed the strongest movement, rising over 100% in the last 7 days according to CoinGecko data. This surge came after Telegram CEO Pavel Durov announced that Telegram would become the driving force behind Ton and participate as the largest validator on behalf of the TON Foundation.

Zcash (ZEC) also set a new year-to-date high, erasing all losses from early 2026. Internet Computer (ICP), Bittensor (TAO), and Ondo (ONDO) also ranked high in weekly gains. This trend has reignited the long-awaited altcoin season debate in the cryptocurrency market.

Cryptocurrency analyst Cryptollica analyzed that the TOTAL3 to Bitcoin ratio is approaching the apex of a multi-year descending triangle. He explained that major altcoin expansions in 2017 and 2020 also began from long-term compression periods relative to Bitcoin. Trader Xaif Crypto argued that the centralized exchange trading volume ratio shows a similar pattern to just before the 2021 altcoin season. He stated, “The centralized exchange trading volume ratio just showed the same pattern as just before the 2021 altcoin season. The yellow bars are rising, and the buy walls are turning green. Everything surged the last time this setup appeared.”

However, structural indicators point to a different conclusion. BlockchainCenter's Altcoin Season Index stands at 35, significantly below the altcoin season baseline of 75. This index measures whether 75% of the top 50 coins have outperformed Bitcoin over the past 90 days. The current figure indicates that the overall market is far from an altcoin season where altcoins outperform Bitcoin.

The 14-day correlation between Bitcoin and altcoins has also fallen to its lowest level since July 2025. BeInCrypto explained that a low correlation often signifies selective outperformance rather than a simultaneous rally across the entire market. Trader Lucky observed that Bitcoin dominance is heading towards 66% and Ethereum (ETH) weakness continues, suggesting that fund rotation has not yet begun. He said, “A weekly close of Bitcoin dominance at 59.6% is the signal. Everything else is noise.”

Lucky analyzed that even if fund rotation eventually occurs, it will not repeat the widespread speculative frenzy of 2021. He explained that funds will first move into Ethereum, Solana (SOL), and large-cap coins, while smaller coins may lag or be completely overlooked. Bitwise Chief Investment Officer Matt Hougan also previously stated that the traditional altcoin season of the past is over, and future rallies will focus on tokens with real utility and traction.

BeInCrypto reported that this week's rebound in some large altcoins aligns more with selective rotation logic than a full-scale rally like in 2021. Whether Bitcoin dominance breaks down around 61% was presented as a key condition to turn altcoin season expectations into an actual trend.

*Disclaimer: This article is for investment reference only, and we are not responsible for investment losses based on it. The content should be interpreted for informational purposes only.*