The cryptocurrency market is showing strong signs of an impending altcoin season, with the Altcoin Season Index reaching between 72-80% in September 2025, marking the highest levels of the year. The index measures the percentage of top 100 altcoins outperforming Bitcoin over a 90-day period, with the 75% threshold officially signaling altcoin season territory.
Bitcoin dominance (BTC.D) has shown technical weakness, with a bear flag breakdown pattern on weekly charts indicating continued capital rotation from Bitcoin to altcoins. This pattern typically signals further declines in Bitcoin's market share relative to other cryptocurrencies.
Several major altcoins are leading the charge: Solana (SOL) surged 17% in the past week, reaching $248 and overtaking Binance Coin to become the fifth-largest cryptocurrency with a $135 billion market cap. Ethereum (ETH) surpassed $4,600, Ripple (XRP) reclaimed $3.00, Dogecoin (DOGE) traded above $0.28, and Cardano (ADA) exceeded $0.90. Institutional confidence was demonstrated by Galaxy Digital's accumulation of $6.5 million in SOL.
However, analysts are warning of potential risks. CryptoQuant researcher Maartunn noted troubling similarities to December 2024, when altcoin speculation soared while Bitcoin's open interest remained flat, leading to a 30% correction in early 2025. The current setup shows altcoin open interest soaring while Bitcoin stays flat, creating potential for a sharp unwind if macroeconomic conditions change or unexpected regulatory announcements occur.
Historical altcoin seasons have produced extraordinary returns, including Dogecoin's 36,000% rally and Shiba Inu's historic performance during the last major altseason. The current market recovery over recent weekends has contributed to pushing more altcoins into outperforming Bitcoin over the 90-day measurement period.