The crypto market is heating up again, and it’s not just Bitcoin in the spotlight. Other cryptocurrencies, also known as altcoin, are also gaining momentum. Earlier this year, we shared a report on why altcoins were struggling to bounce back in 2025. But now, after months of slow and sideways movement, signs are emerging that the long-awaited altcoin season might finally be starting.

So, what’s driving this shift? Let’s break it down.

Bitcoin loses ground as other cryptos rise

Bitcoin’s share of the cryptocurrency market has dropped from a high of 65.1% on June 27 to 59.2% this week, marking one of its largest declines this year. In the past, when Bitcoin’s dominance fell below 55%, it usually signaled the start of an ”altcoin season,” when other cryptocurrencies tend to perform better than Bitcoin. We’re not quite there yet, but things seem to be heading in that direction.

Meanwhile, Ethereum has been climbing fast, rising from under $2,350 to a recent high of $3,843, its highest price since March. In past bull runs, Ethereum’s rise has often been an early sign that an ”altcoin season” might be coming. That’s because when Ethereum rises, it typically indicates that investors are shifting funds from Bitcoin to other, more volatile cryptocurrencies, including smaller and newer ones

Altcoin season index flashes a cautious green

According to the Altcoin Season Index by CoinMarketCap, 56 of the top 100 coins have outperformed Bitcoin in the past 90 days, a classic threshold for the beginning of altcoin season. The index currently hovers around 56 points, in early altcoin season territory.

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…So where is the money flowing?

The altcoin rally isn’t spread out evenly, and different types of coins are gaining for different reasons:

• Memecoins like Pudgy Penguins (PENGU) are leading the pack, jumping a massive 611% in the last 90 days. SPX6900 (SPX) is also up 285%.

• DeFi tokens such as Aave and Uniswap are getting attention again, thanks to talks about sharing fees with users.

• Older tokens from past crypto cycles are making a comeback. These coins are more familiar and easier to trade, so money is flowing into them first.

• AI-related coins like Virtual and Bittensor are doing well, too.

Meanwhile, Solana has climbed back above $200, and XRP hit a new yearly high of $3.64, helped by the growing excitement around crypto ETFs.

Not a full altcoin season, yet

Even though many altcoins are rising, we’re not seeing the kind of “everything goes up” rally from past altcoin seasons. Instead, the current cycle is more focused, with gains mostly in specific sectors like:

• Projects with real-world use or strong stories

• Hyped memecoins

• Tokens gaining interest from big investors or ETFs

What’s next?

Big-picture events, such as US crypto regulations, expected Fed rate cuts, and China’s economic support, could boost market liquidity. That said, it’s still early. While momentum is growing, true altcoin seasons are only clear in hindsight. For now, things are heating up quickly, but caution is still wise.

Research Newsletter

Each week the 21Shares Research team will publish our data-driven insights into the crypto asset world through this newsletter. Please direct any comments, questions, and words of feedback to research@21shares.com

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