The cryptocurrency market is showing signs of a potential shift towards an \"altcoin season,\" as momentum begins to move away from Bitcoin. Over the past few days, Bitcoin's dominance in the market has dropped significantly, falling from over 65% to 63.89%. This change occurred shortly after Bitcoin surpassed $100,000 for the first time since February 3.

This movement has triggered a widespread rally among alternative cryptocurrencies, known as altcoins. Ethereum, the second-largest cryptocurrency by market capitalization, has seen a nearly 13% increase in value within the last 24 hours. Other prominent altcoins, including Solana (SOL), Dogecoin (DOGE), and Cardano (ADA), have each experienced gains exceeding 6%.

Historically, when Bitcoin dominance reaches high levels, it indicates that Bitcoin is outperforming the broader market. However, the recent decline in Bitcoin dominance, along with a rebound in the ETH\/BTC ratio from its lowest point since 2020, suggests that investors might be reallocating their investments from Bitcoin to altcoins. This reallocation pattern is often referred to as a \"capital rotation.\"

CryptoQuant CEO Ki Young Ju recently stated that the traditional Bitcoin cycle theory may no longer apply due to the influence of traditional finance institutions entering the crypto space. The ETH\/BTC ratio hitting its lowest level since 2020 further supports the idea that Ethereum has been underperforming compared to Bitcoin. A recovery from such historically low levels could signify the beginning of a significant trend shift favoring altcoins.

If Bitcoin dominance continues to decrease while the ETH\/BTC ratio increases, it will strongly indicate that the market is moving towards an altcoin season. Rising altcoin trading volumes and the migration of investment funds into various sectors suggest that the altcoin market could experience a major uptick starting in May 2025.

The CoinMarketCap Altcoin Season Index has climbed from 23 to 36 in the last four days. This index helps determine whether Bitcoin or altcoins perform better over a given period. Readings below 25 denote \"Bitcoin Season,\" where Bitcoin outperforms most altcoins. Values between 25 and 75 are seen as neutral, while figures above 75 confirm the presence of an \"Altcoin Season.\"

The current rise into neutral territory follows a yearly low of 12 in late April, marking the weakest point since December, when it reached a peak of 87. The CMC Altcoin Season Index calculates whether at least 75% of the top 100 coins (excluding stablecoins and asset-backed tokens like WBTC and stETH) have outperformed Bitcoin over the previous 90 days.

As of now in 2025, Bitcoin has increased by 10% year-to-date, surpassing nearly all major altcoins except XRP, which has gained over 12%. In contrast, Ethereum remains down 30% year-to-date, while coins like Chainlink (LINK), Dogecoin (DOGE), Avalanche (AVAX), and Shiba Inu (SHIB) have all declined by more than 20%.

Even though Bitcoin has shown resilience so far this year, the substantial drop in Bitcoin dominance, robust altcoin rallies in early May, and the increasing Altcoin Index all point to the likelihood that an altcoin season might commence in May 2025.

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