I just noticed something quite interesting about the current market psychology. The altcoin season index is at 21, and this number says a lot about the current state of the cryptocurrency market.

Many people might not know what the altcoin season index is. It is basically a tool that measures the performance comparison of the top 100 cryptocurrencies (excluding stablecoins) against Bitcoin over the past 90 days. This 21 means that only 21% of those coins have outperformed Bitcoin. In other words, Bitcoin is dominating the market completely.

I recall market history, and such Bitcoin dominance phases often precede altcoin boom periods. A typical example is late 2020 — the altcoin season index was also stagnant within the Bitcoin-favored zone, then exploded past 75 in early 2021. So, the current situation isn’t unusual.

But why does Bitcoin dominate so much? There are a few clear reasons. First, institutional investment funds still mainly pour money into Bitcoin through ETF products. Second, positive signals from regulations also reach Bitcoin first, creating a “safe” effect for investors. Third, Bitcoin’s network activity remains at record-high levels, demonstrating the health of this platform.

The beauty of the altcoin season index is that it’s built on quite thorough data. The 90-day timeframe helps filter out short-term volatility, focusing on the top 100 assets by market cap to avoid noise from smaller tokens. Excluding stablecoins and wrapped tokens ensures the index measures the pure performance of altcoins relative to Bitcoin.

Some experts see this phase as a consolidation step, where altcoins build a solid foundation. Others view it as a warning sign of decreasing risk appetite. Anyway, data from exchanges show that Bitcoin-to-stablecoin trading ratios are significantly higher than altcoin pairs, and funding rates in the altcoin futures market are neutral or negative.

However, this environment creates an interesting opportunity. When the altcoin season index is so low, fundamentally strong altcoins often have undervalued prices compared to Bitcoin. This is when disciplined investors can accumulate before the flow of capital returns.

What will trigger the shift? Usually, Bitcoin establishing new highs and stabilizing increases overall confidence. Then, strong narratives emerging in DeFi, NFTs, or breakthroughs in blockchain scalability can drive capital rotation. Deep observers tend to focus on social sentiment, developer commitments, and protocol revenue to anticipate when the altcoin season index will change.

I believe many are still waiting for the altcoin season to return. But the lesson from history is that these Bitcoin dominance phases are normal, not exceptions. The key is to understand market cycles well, manage risks properly, and focus on long-term fundamentals rather than chasing short-term price movements. If interested, you can follow the altcoin season index on platforms like Gate to stay updated on market sentiment.