Bitcoin dominance peaks? The footsteps of alt season are drawing near?

1. Bitcoin's Dominance: A Critical Point or a New Starting Point?

The current Bitcoin market capitalization ratio (BTC.D) has surpassed 64%, reaching a new high since mid-2020. This data reflects the ongoing preference of institutional funds for the "digital gold" attribute, especially under macroeconomic uncertainties (such as inflation and geopolitical conflicts) and policy inclinations (such as the SEC's "legitimacy endorsement" of Bitcoin), making Bitcoin the core choice for safe-haven funds.

However, historical patterns show that peaks in Bitcoin's dominance often signal the beginning of capital rotation towards altcoins. For example, in the cycles of 2017 and 2021, after BTC.D exceeded 65%, altcoins experienced explosive growth. The current market contradiction is:

Differentiation of institutional funds: Although Bitcoin ETFs continue to attract capital (e.g., BlackRock's IBIT manages assets exceeding $78.8 billion), the staking expectations for Ethereum spot ETFs (expected to be approved in 2025) may accelerate the transfer of funds towards ETH and ecological projects.

Technical signals: If BTC.D falls below 60% and altcoin trading volume surges, it may confirm a trend reversal.

II. The "thermometer" of the altcoin season: resonance of data and narrative

Key Indicator Analysis:

Shanzhai Season Index: Recently rebounded to 40, although it has not reached the "confirmation line" of 75, it has significantly improved from the low point in August 2024.

ETH/BTC exchange rate: currently at 0.024, if it breaks through 0.03 and continues to rise, it may ignite market confidence in altcoins.

Capital rotation signal: Ethereum rose 35% in a single week in May, with some altcoins (such as AI and RWA sectors) outperforming the market, indicating a recovery in risk appetite.

Driving factors:

Expectations of liquidity easing: The Federal Reserve's rate cut cycle may begin in mid-2025, coupled with synchronous easing by global central banks, increasing the attractiveness of high-risk assets (such as altcoins).

Regulatory Easing: The Trump administration's friendly policies towards cryptocurrencies (such as lifting SEC custody restrictions and promoting stablecoin legislation) may unleash the ecological potential of public chains like Ethereum.

Technical Upgrade: The Ethereum Pectra upgrade (April 2025) will optimize the staking mechanism, lower the participation threshold, and further cement its status as the "cornerstone of decentralized applications."

3. Risks and Strategies: How to Deal with Uncertainty?

Potential risks:

Bitcoin volatility intensifies: If it fails to break through the historical high (currently around $109,000), it may trigger a market correction, dragging down altcoins.

Regulatory fluctuations: The SEC's investigation into the "securities nature" of Ethereum has not been fully resolved, which may suppress capital inflows.

Macroeconomic Disturbances: The refinancing wave of U.S. Treasury bonds (3.5-4 trillion USD) may push up real interest rates and suppress the valuation of risk assets.

IV. Conclusion: How do the gears of the cycle turn?

The current market is in a delicate balance between "Bitcoin dominance" and the "emergence of altcoin season." Although Bitcoin's dominance has not clearly peaked, early signs of capital rotation (such as ETH leading the rally and the rebound of the altcoin index) are already faintly visible. If the Federal Reserve lowers interest rates and Ethereum ETFs are approved, altcoins may replicate the explosive trajectory of 2021.

Key observation node:

June 2025: The Federal Reserve's interest rate decision and CPI data will determine whether the expectations for liquidity easing can be fulfilled.

Q3 2025: The effects of the Ethereum Pectra upgrade and the progress of ETF approvals may become catalysts for ecological explosion.

For investors, it is important to seize the "fat tail opportunities" while also being vigilant about black swan events (such as geopolitical conflicts and sudden regulatory changes). The answer from the market may lie in the resonance between data and narrative.