As Bitcoin Dominance Hits 65%, Altcoin Season Remains Out of Sight

Bitcoin dominance (BTC.D) hit 64.98% in the first week of May, which is its highest since 2021. And this has started the chatter about the delayed altcoin season.

Independent analyst Markus Thielen shared on social media how the consistent trends that indicated when traders might rotate capital into altcoins are no longer valid. The underperformance of Ethereum and the lack of a strong alternative continue to delay the altcoin season.

Now, analysts are far from aligned on what happens next.

Mixed Signals on Altcoin Season

Matrixport’s May 5 chart places Bitcoin dominance alongside altcoin outperformance signals. According to their model, the market isn’t in a position to rotate yet. Ethereum is still underperforming, and most altcoins aren’t showing signs of leadership. The chart reads more like a warning than a green light.

But to quote another analyst, Darky thinks we’re close to a peak in dominance. If correct, this could signal a pullback in BTC.D and fuel altcoin gains. But other market watchers, like Milk Road, are not convinced. 

Looking at the other side of the coin, data from Capriole Investments (chart below) shows that only 24% of altcoins have outperformed Bitcoin in the past 90 days. This is far below the levels seen in past altseasons, demonstrating how Bitcoin is soaking up liquidity rather than sharing it.

Altcoin rally needs more than just dominance levels

Others believe structural changes in this cycle are making altcoin seasons harder to predict. Apollo’s Thomas Fahrer says institutions like BlackRock and Microstrategy are now buying Bitcoin, and they are not likely to rotate into alts. They hold for long-term conviction, not to chase speculative rotations.

Adding fuel to Bitcoin’s growing grip on the market, Michael Saylor just yesterday hinted that MicroStrategy is preparing for another large purchase. If it goes through, the company’s total holdings could climb close to 600,000 BTC

Such a big buy from one of the largest corporate holders could give prices the nudge they need. For now, altcoins are still on the sidelines while Bitcoin takes the lead.