Will 2025 Bring A New Altcoin Season? Analyzing Bitcoin Influence And Market Trends

Ronaldo Marquez

3 months ago

3 mins read

Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Created by industry experts and meticulously reviewed

The highest standards in reporting and publishing

How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

A recent report from Kaiko Research highlights the relationship between Bitcoin (BTC) rallies and altcoin performance to gauge these assets’ potential next moves amid broader market challenges.

Bitcoin And Altcoins Struggle To Recover Previous Peaks

Historically, strong Bitcoin performance has often triggered what is known as “altcoin season,” when investors rotate profits from Bitcoin into altcoins, spurring broader market growth.

However, as the market enters the second quarter (Q2) of the year, the landscape appears more complex, with many altcoins still struggling to reach their previous highs from 2021 and 2022.

Despite Bitcoin hitting a new all-time of $109,000 earlier this year, the sentiment surrounding altcoins remains mixed. Many altcoins have not recovered to their peak levels, and trading activity is increasingly concentrated around a select few tokens.

The report highlights that while Bitcoin has shown resilience, particularly in light of increasing interest from institutional investors, altcoin trading volume has surged, signaling a shift in capital allocation preferences.

The impact of higher global interest rates has also reshaped investor risk appetite. Unlike the liquidity-driven bull runs of 2021 and 2022, the current environment is characterized by tighter monetary policy, prompting traders to be more cautious and selective.

The report outlines a notable divergence in altcoin performance following the US elections last November. While Bitcoin reached new heights, many altcoins remained below their previous peaks.

Large-cap coins like Solana (SOL) and XRP experienced significant surges; however, mid- and small-cap altcoins have had a harder time keeping pace. In fact, small-cap altcoins tracked by Kaiko’s Small-Cap Index have seen declines of over 30%.

Post-Election Confidence Boosts US-Based Projects

Despite these challenges, altcoin trading volume has rebounded, with dominance relative to Bitcoin reaching levels not seen since 2021. However, this volume growth is not evenly distributed; the top 10 altcoins now account for an astonishing 64% of total trading volume, indicating a significant concentration of liquidity.

According to Kaiko’s report, this trend underscores a shift from a more speculative retail-driven market to one favoring institutional investment in a narrow selection of high-liquidity assets.

The research firm also highlights the increasing institutional interest in altcoins, evidenced by a wave of ETF filings. This interest persists even as retail sentiment remains weak, suggesting that institutions are responding positively to regulatory clarity in the US.

The recent easing of regulatory pressures, including the US Securities and Exchange Commission’s (SEC) decision to drop lawsuits and repeal restrictive rules, has fueled optimism among investors.

US-based projects are performing notably well post-election, reflecting a shift in confidence towards domestic initiatives. However, this does not necessarily signal the onset of a broad altcoin season, according to Kaiko.

Lastly, the report concludes that as President Trump’s proposals to make the US a crypto hub gain traction, there is a concern that this focus may favor domestic projects over international altcoins, limiting the potential for a widespread rally across the altcoin market.

At the time of writing, the market’s largest altcoin, Ethereum (ETH), is consolidating at $1,800, down 45% year-to-date, further highlighting the challenges facing these assets.

Featured image from DALL-E, chart from TradingView.com

Ronaldo Marquez

Ronaldo is an experienced crypto enthusiast dedicated to the nascent and ever-evolving industry. With over five years of extensive research and unwavering dedication, he has cultivated a profound interest in the world of cryptocurrencies.

Ronaldo's journey began with a spark of curiosity, which soon transformed into a deep passion for understanding the intricacies of this groundbreaking technology.

Driven by an insatiable thirst for knowledge, Ronaldo has delved into the depths of the crypto space, exploring its various facets, from blockchain fundamentals to market trends and investment strategies. His tireless exploration and commitment to staying up-to-date with the latest developments have granted him a unique perspective on the industry.

One of Ronaldo's defining areas of expertise lies in technical analysis. He firmly believes that studying charts and deciphering price movements provides valuable insights into the market. Ronaldo recognizes that patterns exist within the chaos of crypto charts, and by utilizing technical analysis tools and indicators, he can unlock hidden opportunities and make informed investment decisions. His dedication to mastering this analytical approach has allowed him to navigate the volatile crypto market with confidence and precision.

Ronaldo's commitment to his craft goes beyond personal gain. He is passionate about sharing his knowledge and insights with others, empowering them to make well-informed decisions in the crypto space. Ronaldo's writing is a testament to his dedication, providing readers with meaningful analysis and up-to-date news. He strives to offer a comprehensive understanding of the crypto industry, helping readers navigate its complexities and seize opportunities.

Outside of the crypto realm, Ronaldo enjoys indulging in other passions. As an avid sports fan, he finds joy in watching exhilarating sporting events, witnessing the triumphs and challenges of athletes pushing their limits. Furthermore, His passion for languages extends beyond mere communication; he aspires to master German, French, Italian, and Portuguese, in addition to his native Spanish. Recognizing the value of linguistic proficiency, Ronaldo aims to enhance his work prospects, personal relationships, and overall growth.

However, Ronaldo's aspirations extend far beyond language acquisition. He believes that the future of the crypto industry holds immense potential as a groundbreaking force in history. With unwavering conviction, he envisions a world where cryptocurrencies unlock financial freedom for all and become catalysts for societal development and growth. Ronaldo is determined to prepare himself for this transformative era, ensuring he is well-equipped to navigate the crypto landscape.

Ronaldo also recognizes the importance of maintaining a healthy body and mind, regularly hitting the gym to stay physically fit. He immerses himself in books and podcasts that inspire him to become the best version of himself, constantly seeking new ways to expand his horizons and knowledge.

With a genuine desire to become the best version of himself, Ronaldo is committed to continuous improvement. He sets personal goals, embraces challenges, and seeks opportunities for growth and self-reflection. Ultimately, combining his passion for cryptocurrencies, dedication to learning, and commitment to personal development, Ronaldo aims to go hand-in-hand with the exciting new era that the emerging crypto technology is bringing to the world and societies.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.