Alt Season Arrives When Bitcoin Dominance Declines… When is the Transition Point?

▲ Bitcoin, Altcoin ©

The Bitcoin-centric market is getting stronger… Despite instances of altcoin surges, market funds are still flowing into Bitcoin.

According to CoinMarketCap, a cryptocurrency market data aggregator, on May 5 (local time), the Altcoin Season Index recorded 38/100, remaining in the 'Bitcoin Season' phase. During the same period, Bitcoin (BTC) dominance rose by 0.2 percentage points over 24 hours to 60.56%, indicating that market funds are concentrating on Bitcoin.

The overall market showed an upward trend, but the center of the flow was clear. While the total cryptocurrency market capitalization expanded by 1.59% to $2.69 trillion and trading volume surged by 107.85%, Bitcoin absorbed most of the liquidity, rising to the $81,700 level. Investor sentiment also remained at a neutral level with a Fear & Greed Index of 50, far from an overheated phase.

Some altcoins showed strong gains, but this remained a limited phenomenon. Following an announcement by Telegram founder Pavel Durov, Toncoin (TON) surged 30%, DOGS rose 69%, and NOT increased 16%, showing surges centered around specific ecosystems. However, these were closer to 'sector-specific rallies' that did not spread across the entire market.

As a result, the current market retains a risk-averse tendency, with investors continuing to prefer relatively stable Bitcoin over volatile altcoins. For altcoins to truly outperform Bitcoin, a structural shift is needed, with the Altcoin Season Index rising above 75.

The key point to watch going forward is the direction of Bitcoin dominance. Only when dominance declines and funds begin to shift to altcoins can a full-fledged altcoin market begin. Currently, there is a possibility that some theme-centric rallies will continue, but it is assessed that conditions are not yet sufficient for it to expand into an 'Alt Season' that lifts the entire market.

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