Bitcoin at the start of a major rally: is altcoin season just around the corner?
BTC above $81,000: the crypto market shifts toward growth
Amid the strengthening of Bitcoin and Ethereum, analysts have once again begun discussing the start of altcoin season. However, market indicators do not yet confirm that capital has begun flowing en masse from Bitcoin into other cryptocurrencies.
The overall growth of the cryptocurrency market has once again sparked discussions about the approaching altcoin season — a period when the largest alternative cryptocurrencies grow faster than Bitcoin. These discussions intensified after the BTC price rose above $81,000 and analysts began forecasting the formation of a new bullish trend*. At the same time, investors began reallocating capital from the artificial intelligence sector to Bitcoin and gold.
* Bullish trend — a sustained upward movement in the market in which an asset's value generally increases and optimistic expectations prevail among investors. The term refers to the way a bull attacks by thrusting its horns upward.
Since August 17, the total cryptocurrency market capitalization has increased by more than 22%. The main drivers were Bitcoin (BTC) and Ethereum (ETH), which gained 25% and 30%, respectively. Both cryptocurrencies reached their highest levels since May of this year.
Is the bearish cycle over? Bitcoin is forecast to make a historic leap
Many analysts believe that Bitcoin's bear market cycle* has ended and that the market may be entering the strongest growth phase in the history of the first cryptocurrency. Observers are also noting the return of institutional demand: investor interest has recovered in virtually all US exchange-traded funds based on various cryptocurrencies.
* Bear market cycle — an extended period in which asset prices predominantly decline, accompanied by weakening demand and negative investor expectations. The term refers to the way a bear attacks by striking downward with its paw.
Just two weeks ago, major market participants described the situation as the most severe bear market period in history. Amid declining activity in the cryptocurrency market, exchanges and traders shifted their attention to shares of companies in the artificial intelligence and semiconductor sectors, particularly Nvidia, SK Hynix, SanDisk, and Micron Technology. However, market sentiment changed dramatically within just a few days.
BitMEX cryptocurrency exchange founder Arthur Hayes said that he views the current situation as the beginning of a new bull market. Bitcoin could very quickly reach several hundred thousand dollars and even the $500,000 mark. He therefore considers now a good time the hold the asset.
Pete Rizzo, head of the BitcoinTreasuries analytics platform, described the situation as anticipating "parabolic growth." In the cryptocurrency market, this expression usually refers to a rapid increase in an asset's price, during which the price line on a chart becomes almost vertical.
Big capital returns: crypto funds push aside AI leaders
Bitcoin-based exchange-traded funds have once again entered the top ten most actively traded ETFs*, displacing some funds focused on artificial intelligence companies. The latter had held leading positions throughout the summer.
* ETF (Exchange-Traded Fund) — a fund whose shares or units are traded on an exchange like ordinary securities. A cryptocurrency ETF lets investors earn profits or incur losses based on changes in the value of the underlying cryptoasset without directly buying or holding it.
Asset management company Bitwise also reported that its exchange-traded funds based on Solana (SOL) set a trading volume record. In addition, trading in an ETF based on Zcash (ZEC) — the largest cryptocurrency in the privacy-focused digital asset sector — began on August 25.
The market turns upward: what CryptoQuant's indicators show
CryptoQuant analysts have recorded an active shift of liquidity from Bitcoin into riskier cryptoassets. According to their assessment, after an extended period of low volatility and modest trading volumes, altcoins have begun attracting investors' attention.
At the same time, CryptoQuant experts recently described most of the altcoin market as "garbage" and warned it could face one of the most difficult periods in its history.
Now, according to CryptoQuant, eight out of ten indicators* used to identify a bull market are showing positive signals. This is the most optimistic result since October 2025, when Bitcoin was trading above $120,000.
* Bitcoin Bull Score Index — an indicator developed by the CryptoQuant analytics platform that assesses the state of the BTC market using ten market and on-chain metrics:
- Bitcoin Demand Growth — shows whether the amount of BTC that market participants are buying and holding is increasing.
- Market Value to Realized Value Z-Score (MVRV-Z Score) — helps determine whether Bitcoin's current price is overvalued or undervalued relative to the average acquisition cost of the coins.
- Profit and Loss Index — assesses whether the majority of bitcoins are in profit or at a loss relative to their acquisition price.
- Bull-Bear Market Cycle Indicator — determines which phase currently prevails in the market: growth or decline.
- Inter-Exchange Flow Pulse — tracks Bitcoin transfers between trading platforms and changes in market liquidity.
- Network Activity Index — assesses the intensity of Bitcoin network usage, including address activity and transaction processing.
- Stablecoin Liquidity — shows the amount of capital held in stablecoins that could potentially be used to purchase Bitcoin and other cryptocurrencies.
- Trader On-Chain Profit Margin — indicates whether short-term market participants are moving and selling BTC at a profit or a loss.
- Trader Realized Price — shows the approximate average price at which short-term holders acquired their bitcoins.
- Technical Signal — assesses BTC price dynamics using price data and technical analysis tools.
Altcoin season is delayed: why Bitcoin is still stronger than the market
Despite analysts' positive statements, objective indicators currently point more toward a market rebound from this year's lows. Even after Bitcoin gained 20% in a week and returned to $80,000, the cryptocurrency remains almost 40% below its October 2025 high. Since the beginning of the year, BTC is still down by around 10%.
The Altcoin Season Index also does not yet confirm the beginning of a full-fledged altcoin season. As of August 26, the Altcoin Season Index stood at 39 points. At the beginning of the month, it had reached 67 points.
The Altcoin Season Index compares Bitcoin's returns with the performance of the top 50 cryptocurrencies by market capitalization over the past 90 days. The calculation excludes stablecoins and wrapped tokens.
The index can range from 0 to 100. Altcoin season is considered to have begun when 75% of the cryptocurrencies on the list outperform Bitcoin — in this case, the index reaches at least 75 points. If fewer than 25% of the coins manage to outperform BTC, the market is considered to be in Bitcoin season.
Another restraining signal is the Bitcoin dominance rate, which remains at around 60%. This indicator reflects the ratio between BTC's market capitalization and the total cryptocurrency market capitalization. Its current value shows that most investor attention is still focused on Bitcoin rather than altcoins.
At the same time, many experts forecast growth in individual cryptocurrencies and industry segments. In their opinion, the market is entering a new stage in which the value of digital assets will increasingly depend on projects' actual revenues rather than solely on investor expectations.