Bitcoin's Rally Tightens Its Grip on Crypto Markets: Is Alt Season Cancelled?

Bitcoin cemented its dominance over the crypto market this weekend, soaring to a new record high and siphoning capital away from altcoins.

The bellwether crypto surged 11% over the past week to set a new all-time high of $125,506, according to CoinGecko data. As a result, Bitcoin’s market dominance—its share of the total crypto market capitalization—reached a three-week high of 59%.

A confluence of factors is fueling Bitcoin’s ascent, experts told Decrypt.

Last week’s surge in the stablecoin market cap to $300 billion and the release of $1 billion in frozen funds from the defunct exchange FTX were key drivers, Stephen Gregory, founder of crypto trading platform Vtrader, told Decrypt.

“This facilitated capital inflows to Bitcoin, pushing its dominance close to 60%,” Gregory noted.

“It’s pretty normal for investors to pile into Bitcoin first during bull runs,” Shivam Thakral, CEO of Indian crypto exchange BuyUcoin, told Decrypt. He described Bitcoin as the “market’s anchor,” a status amplified by renewed interest from institutional investors.

Gracy Chen, CEO of Bitget, echoed this, calling the dominance metric “a clear signal of capital gravitating toward the market’s most trusted asset amid renewed institutional demand and broader volatility.”

Wen altseason?

The critical question for investors is whether this Bitcoin-centric rally marks the end of the much-anticipated “altcoin season or alt season,” a period during which altcoins dramatically outperform.

The experts suggest not yet.

“This doesn’t mean the end of alt season,” said Gregory, though he issued a note of caution. While a rotation into altcoins is still on the table, Gregory believes that Bitcoin’s declining bullish momentum may lead to a “bear trap that could flush out more leverage” before the market resumes its ascent.

Under these conditions, if Bitcoin’s dominance fails to push significantly above 60%, capital could quickly rotate, “resulting in an altcoin pump,” he added.

Users of prediction market Myriad, launched by Decrypt’s parent company DASTAN, place a roughly 60% chance on Bitcoin’s dominance surging to 64% instead of dropping down to 54%, down from 69% at the start of the month.

Chen believes “a true altseason” may still be a few weeks away and awaits Bitcoin’s consolidation to trigger a capital rotation of sidelined liquidity into high-conviction sectors like AI, DeFi, and layer-2s.

She advised investors to watch for a key signal: Bitcoin’s dominance moving below 55% as a potential trigger for altcoin momentum.

Despite the short-term uncertainty over capital rotation, the overall market sentiment remains positive. “It is a very good time for the markets, and is likely going to remain that way for the short-term foreseeable future,” Le Shi, managing director at algorithmic trading and market-making firm Auros, told Decrypt in an interview during Token2049 in Singapore last week.