Altcoins could be on the verge of a breakout as market dynamics increasingly point toward a shift away from Bitcoin, according to Coinbase.
In its latest monthly outlook, released Thursday, Coinbase Institutional’s global head of research David Duong said current conditions “suggest a potential shift towards a full-scale altcoin season” heading into September. The firm defines such a season as a period when at least 75% of the top 50 non-Bitcoin cryptocurrencies outperform BTC over a 90-day span.
Coinbase’s call aligns with a growing consensus among traders and analysts expecting an imminent rotation into alternative digital assets. Duong highlighted that “significant retail capital” is still parked in money market funds, adding that a Federal Reserve policy shift could unlock greater retail participation in the medium term.
Recent economic data has reinforced expectations for a looser monetary policy. July’s U.S. Consumer Price Index held steady at 2.7% year-on-year, pushing the odds of a September rate cut to 92% in futures markets. Lower interest rates tend to funnel fresh liquidity into risk assets, a trend that could favor high-volatility tokens.
A key driver of this potential transition is Bitcoin’s shrinking market share. BTC dominance has dropped from above 65% in May to roughly 59% this month, its lowest level since January, according to TradingView.
“Bitcoin dominance has just formed its first monthly bearish cross since January 2021,”
noted crypto day trader Ito Shimotsuma, recalling that the previous occurrence preceded a four-month altcoin rally.
“Something similar this time will cause an up-only rally till December 2025,”
he added.
Altcoin season indexes, which track the performance of major non-Bitcoin tokens relative to BTC, are trending upward but have yet to breach the 75-point mark historically associated with confirmed altseasons. CoinMarketCap’s index currently reads 44, up from under 25 in July, while Blockchain Center’s measure sits at a neutral 53 and CryptoRank’s at 50.
Despite the mixed signals, the altcoin market capitalization has surged more than 50% since early July. Duong attributed the momentum to institutional positioning, Ethereum-focused interest, and narratives surrounding digital asset treasuries and stablecoins.
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