The altcoin market has experienced a significant downturn at the start of 2026, with the Altcoin Season Index falling sharply to 39, indicating that Bitcoin is now outperforming the majority of alternative cryptocurrencies. This marks a reversal from late 2025, when the same index surged above 75, signaling a strong altcoin season.
The shift back to Bitcoin dominance coincides with renewed geopolitical and trade tensions. Over the weekend of January 19-20, 2026, former U.S. President Donald Trump announced a threat to impose a 10% tariff on goods from several European nations—including Denmark, Norway, Sweden, the UK, France, Germany, the Netherlands, and Finland—starting February 1. The stated condition for avoiding the tariffs is an agreement allowing the United States to seize Greenland.
Bitcoin's current market dominance stands at approximately 59%, according to CoinMarketCap data, maintaining a strong grip on the total crypto market capitalization. Analysts highlight that this metric, known as BTC.D, is a critical reference point for predicting altcoin seasons. Historical patterns from 2017 and 2021 show that once Bitcoin dominance begins to decline decisively, a full-blown altcoin season can unfold rapidly, often within a one-to-two-month timeframe.
In 2017, BTC.D plummeted from around 96% in March to about 60% by May, triggering one of the most aggressive altcoin rallies. A similar pattern occurred in 2021, with dominance falling from 60% in April to near 40% by mid-May, propelling Ethereum and major meme coins like Dogecoin (DOGE) and Shiba Inu (SHIB) to all-time highs.
The analyst emphasizes that the transition can be swift and is often underestimated by investors. For a sustainable altcoin breakout, Bitcoin likely needs to first set a new all-time high to restore broad market confidence and attract retail FOMO (fear of missing out). Current macro signals, including strength in small-cap equities and record highs for gold and silver, are seen as supportive of a future risk-on environment that could benefit higher-beta assets like altcoins.
