There is a lot of talk about whether an altcoin season is coming. Ethereum has been performing very well. China recently announced a stimulus package, and the US Federal Reserve is expected to cut interest rates in September.
However, according to an expert from the cryptocurrency exchange Deribit , owned by Coinbase, the altcoin season is still on hold. The current picture shows cautious optimism rather than extreme euphoria. Although Ethereum has surged, it has not reached the threshold needed to confirm the event, and Medium and small- Capital altcoins still lack sufficient volume .
Are the macroeconomic factors finally in sync?
For many crypto traders, the allure of altcoin season is like a gold rush in the crypto world. The period represents a market shift away from big players like Bitcoin and Ethereum and into a range of smaller, more speculative assets. The event ends with an explosive bull run.
Current macroeconomic factors and several on chain indicators have hinted at the arrival of the long-awaited altcoin season.
In a speech today at the Jackson Hole Economic Conference, Federal Reserve Chairman Jerome Powell signaled a more dovish stance on the possibility of a rate cut. He hinted that “the changing balance of risks” could require an adjustment in Fed policy, hinting at potential expansionary policies for September.
Earlier this week, it was reported that China had announced a new stimulus package to support its struggling economy. While details are still being released, the move is seen as a significant step toward easing policy in one of the world's largest economies.
Jean-David Péquignot, Chief Commercial Officer at Deribit, sees a combination of favorable macroeconomic policies as key triggers for a potential altcoin season.
“Central bank policy easing could reduce yields on safer assets and inject liquidation into the financial system, reducing long-term return expectations… As a high-risk asset, crypto tends to amplify what is happening in the stock market, and when liquidation is more abundant, speculative flows increase,” Péquignot told BeInCrypto.
The sharp rise in Ethereum price has reinforced these expectations.
Ethereum's Surge Sparks Hope
In a strong show of renewed risk appetite from investors, Ethereum prices surged following Powell’s announcement. This price action and the recent surge in inflows into spot Ethereum ETFs represent important developments.
According to Péquignot's analysis, Ethereum's outperformance over Bitcoin is an important signal for the broader market.
“The ETH/ BTC ratio often acts as a leading indicator when BTC begins to underperform and investors show increased appetite for riskier Cryptoasset ,” he said, adding, “[It] can also have a spillover effect, where Ether’s outperformance reinforces investor appetite for innovation and triggers FOMO in the broader market.”
Despite these promising signs, they are not enough to confirm the emergence of a full-fledged altcoin season.
Bitcoin still dominates
A broad market rally defines a true altcoin season, but some key metrics suggest this hasn't happened yet . CoinMarketCap's Altcoin Season Index, for example, measures XEM 75% of the top 100 altcoins have outperformed Bitcoin over 90 days.
At the time of writing, the index stands at 44 out of 100.
CMC Altcoin Season Index“CMC’s Altcoin Season Index has also recovered but remains below the key level of 75. Many Medium and small-cap Capital are still lagging or trading sideways, indicating no widespread altcoin outperformance,” Péquignot said.
Meanwhile, Bitcoin still dominates the cryptocurrency market.
Bitcoin continues to dominate the cryptocurrency market. Source: CoinMarketCap .“ BTCD remains high over the five-year period at 58%, to the point where BTC remains the main catalyst for institutional allocations in particular,” Péquignot added.
These indicators show that Capital is still largely focused on Bitcoin, which is often considered the safest digital asset . For the altcoin season to truly arrive, these indicators will need to change.
What factors are needed to kick off the altcoin season?
While recent news has provided significant momentum, Péquignot is still waiting for all the factors to come together to be fully confident in making a decision. He explained that the altcoin season is actually signaled by a series of events that confirm a broad-based change in investor behavior.
“A breakout in the ETH/ BTC ratio signals prolonged BTC weakness ; a sharp drop in BTC dominance, indicating a clearer Capital rotation; the Altcoin Season Index pushing to 75, confirming a major altcoin expansion; and large retail inflows evidenced by on chain activity, social media activity, and larger altcoin volume ,” he explained.
This widespread Capital movement, combined with favorable conditions from the world’s strongest economies, could be enough to divert liquidation into altcoins. However, even with these positive developments, the path is not without risks.
Final triggers and potential pitfalls
Several factors could derail a potential rally. For example, a change in central bank policy could reverse the current trend.
“A sudden surge in inflation could force central banks to pause or reverse easing sooner than expected, which would hurt risk assets and reverse Capital flight,” Péquignot told BeInCrypto.
He also warned that the dynamics of the crypto market, especially the use of high leverage, could lead to sharp corrections.
“As altcoin rallies are fueled by retail investor greed and heavy leverage, over- or under-investment stories can lead to profit-taking or loss-limiting, triggering liquidations that can cut short any altcoin season,” Péquignot added.
Additionally, the imposition and reversal of US trade tariffs continues to create Dai uncertainty among investors. Such an environment could quickly dampen interest in altcoins.
Waiting Game
Altcoin season will require more patience this year. Although it hasn't arrived yet, the conditions are gradually forming.
The powerful combination of macroeconomic tailwinds and Ethereum’s recent growth has provided the strongest signal yet that the market is starting to turn. However, all the indicators needed to confirm this event have not yet been met.
The waiting game continues, but for the first time in a long time, the Shard for the next big crypto gold rush appear to be falling into place.
