Why is the山寨 season arriving late?
TechFlow Selected TechFlow Selected
Why is the山寨 season arriving late?
It is merely waiting for the right conditions.
Navigating Web3 tides with focused insightsAuthor: A Aldokali
Translation: Baihua Blockchain
For months, crypto traders have been anxiously refreshing price charts, waiting for the "altseason" when altcoins surge dramatically. Yet, despite bullish forecasts and brief rallies, altseason has yet to arrive.
Bitcoin continues to dominate the market, leaving altcoin enthusiasts wondering: why is altseason delayed? And will it happen at all?
01 Bitcoin's Iron Grip: Dominance and Institutional Adoption
Bitcoin dominance—the share of Bitcoin in the total cryptocurrency market capitalization—has hovered around 60% during 2024–2025, a level unseen since the 2017 bull run. This dominance reflects market preference for Bitcoin due to its stability and widespread institutional adoption.
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Institutional Focus: Bitcoin ETFs approved in late 2023 and early 2024 attracted billions of dollars into BTC, establishing it as a “safe-haven asset” within the crypto market. Major institutions like BlackRock and Fidelity prioritize Bitcoin over altcoins.
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Halving Effect: The 2024 Bitcoin halving reinforced its scarcity narrative, drawing capital that might otherwise flow into riskier altcoins.
As analyst Benjamin Cowen noted, “Altcoins typically start rising only after Bitcoin completes its parabolic move.” Since BTC continues to reach new highs, investors see little reason to rotate into altcoins.
02 Macroeconomic Headwinds: The Fed’s Tight Control on Liquidity
Federal Reserve monetary policy has been the silent killer of hopes for altseason. Unlike the 2020–2021 bull market, fueled by near-zero interest rates and quantitative easing (QE), 2024–2025 is defined by quantitative tightening (QT) and high interest rates.
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Liquidity Squeeze: QT drains liquidity from financial markets, reducing risk appetite. Altcoins, as speculative assets, depend on excess capital; without liquidity, they stagnate.
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Delayed Rate Cuts: Despite speculation about a dovish shift, rate cuts remain distant. Until borrowing costs fall, both institutional and retail investors are hesitant to take risks on altcoins.
This macro backdrop sharply contrasts with previous altseasons driven by abundant liquidity, when meme and DeFi tokens surged.
03 Altcoin Supply Glut: Too Many Coins, Not Enough Demand
The crypto market is flooded with over 15,000 altcoins, but liquidity hasn’t kept pace. New projects launch daily, yet the total capital pool remains fragmented, diluting potential returns.
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Capital Fragmentation: More tokens compete for the same liquidity, making it hard even for promising projects to gain traction.
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Cautious Venture Capital: Crypto venture funding dropped from $29.4 billion in 2022 to $7.1 billion in 2024, severely limiting development funds for altcoins.
This oversupply creates a “crowded market,” where only tokens with strong utility or viral momentum can stand out—a far cry from the 2017 ICO frenzy or 2021 NFT mania.
04 Retail Investors Are Missing
Altseasons are typically fueled by retail FOMO (fear of missing out). However, retail participation in 2025 is notably weaker compared to past cycles.
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Low Social Sentiment: Metrics tracking social media activity around crypto show a lack of the frenzy seen during the 2021 Dogecoin or Shiba Inu boom.
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Cautious Behavior: Retail investors burned in the 2022 market crash now favor Bitcoin over altcoins. As one trader put it: “Why buy memes when BTC is up 150% this year?”
Without retail enthusiasm, altcoins lack the fuel to ignite sustained rallies.
05 Regulatory Uncertainty: A Double-Edged Sword
Regulatory clarity is critical for altcoins, especially those classified as securities. While the pro-crypto stance of the Trump administration sparked optimism, progress remains slow.
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ETF Delays: Altcoin ETFs for Solana, XRP, and Dogecoin remain stuck in regulatory limbo. Analysts estimate 65–90% approval odds, but timelines are unclear.
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DeFi and Stablecoin Scrutiny: Regulatory ambiguity around decentralized finance (DeFi) protocols and stablecoins stifles innovation and deters institutional capital.
Uncertainty will persist until regulators approve altcoin ETFs or establish clear rules.
06 Historical Patterns: Patience Is a Virtue
Crypto markets are cyclical. Altseasons typically emerge in the final year of Bitcoin’s four-year cycle. While 2025 is expected to bring the next altseason, delays are not unprecedented.
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2017 vs. 2021: Both altseasons occurred after Bitcoin reached new highs and entered consolidation. If BTC stabilizes above $100,000, capital may eventually flow into altcoins.
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ETH/BTC Ratio: Ethereum’s weak performance against Bitcoin signals altseason hasn’t started. Historically, ETH leads altcoin rallies, but its ratio versus BTC remains near multi-year lows.
07 Summary
Altseason isn’t gone—it’s just waiting for the right conditions. Bitcoin dominance, macroeconomic pressures, and regulatory hurdles have temporarily paused altcoin mania. Yet history shows that once BTC stabilizes and liquidity returns, altcoins will have their moment.
For now, patience and selective investment in projects with strong fundamentals—such as AI, DeFi, or Layer-2 solutions—are key. As the crypto adage goes: “Time in the market beats timing the market.”
Stay alert, stay cautious, and keep a close eye on Bitcoin dominance. The altseason clock is ticking—it’s not a matter of if, but when.
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