Analysts are increasingly confident that the anticipated “altcoin season” will begin in the fourth quarter of this year, with key technical indicators and market dynamics aligning to support this view. A critical sign of this potential shift is the Altcoin Season Index, which recently completed a textbook “cup and handle” pattern, a classic bullish chart formation typically preceding a breakout. This has led to forecasts that capital will continue to shift from Bitcoin into altcoins, particularly Ethereum and other mid- to small-cap assets [1].
The current market environment is marked by Bitcoin’s declining dominance in the cryptocurrency market. As of this month, Bitcoin’s market dominance has fallen to as low as 59%, down from 65% in May. This decline indicates a growing shift of investor attention and capital into altcoins, particularly Ethereum. Ethereum has seen strong relative performance, with gains of 136% since May compared to Bitcoin’s 20%, signaling the early stages of a broader capital rotation [1].
The anticipated Federal Reserve rate cuts in September and October are also expected to play a significant role in triggering a full-scale altcoin season. These cuts could unlock trillions of dollars in liquidity, which may further fuel speculative momentum in the altcoin market. Market participants are currently pricing in an 83.1% chance of a 25-basis-point rate cut in September and a 44.4% chance in October, according to the CME Group’s FedWatch Tool. This potential liquidity injection is likely to support improved market conditions, including increased trading volumes and order book depth [1].
Historically, altcoin seasons are defined by at least 75% of the top 50 altcoins by market cap outperforming Bitcoin over a 90-day period. This typically occurs as investors seek higher returns in a bull market and as retail speculative activity intensifies. The current conditions suggest that this pattern could repeat itself in Q4, with Ethereum serving as the primary catalyst. Institutional adoption of Ethereum has surged, particularly in areas such as decentralized finance (DeFi), non-fungible token (NFT) infrastructure, and staking. The total amount of Ethereum staked has reached an all-time high, further reinforcing its institutional appeal [4].
Layer-2 solutions and meme-driven altcoins are also positioned to benefit from the expected capital rotation. For example, projects like Bitcoin Hyper ($HYPER) and Maxi Doge ($MAXI) are gaining traction as high-beta assets with strong growth potential. $HYPER, as a Layer-2 solution for Bitcoin, is aligned with broader trends in blockchain scalability and DeFi integration, while $MAXI has captured the meme-driven retail energy that historically drives altcoin season momentum [4]. Together, these projects represent different phases of the altcoin season narrative, from institutional infrastructure to speculative retail-driven gains.
Given the convergence of technical patterns, institutional interest, and macroeconomic factors, the conditions are set for a robust altcoin season in Q4. Investors are advised to monitor Bitcoin dominance, altcoin indices, and trading volumes to gauge the market’s direction. While opportunities abound, it is essential to conduct thorough due diligence and remain mindful of the inherent volatility and risks associated with altcoin investments [3].
Source:
[1] Coinbase Predicts ‘Full Scale Altcoin Season’ Heading Into … (https://finance.yahoo.com/news/coinbase-predicts-full-scale-altcoin-123107867.html)
[2] Why 2025 Is Shaping Up as the Strongest Altcoin Season Yet (https://www.ccn.com/analysis/crypto/2025-strongest-altcoin-season-yet/)
[3] Altcoin Season Explained: What it is and How to Spot It (https://icobench.com/academy/altcoin-season/)
[4] Analyst Calls Q4 Altseason: Best Altcoins to Buy Before the … (https://disruptafrica.com/2025/08/21/analyst-calls-q4-altseason-best-altcoins-to-buy-before-the-breakout/)
