Coinbase Signals Potential Full-Scale Altcoin Season Ahead as Bitcoin Dominance Slips
Altcoins could be on the verge of a major breakout, with market conditions pointing toward a possible full-scale altcoin season in September, according to a new report from Coinbase Institutional.
Coinbase Analyst Sees Key Shift in Market Structure
In its monthly outlook released Thursday, David Duong, Coinbase Institutional’s global head of research, wrote:
“We think current market conditions now suggest a potential shift towards a full-scale altcoin season as we approach September.”
Coinbase defines altcoin season as a period when at least 75% of the top 50 altcoins by market cap outperform Bitcoin (BTC) over the prior 90 days.
Duong highlighted “significant retail capital sitting on the sidelines” in money market funds, noting that potential Federal Reserve interest rate cuts could unlock greater retail participation in the months ahead.
Macro Tailwinds Could Fuel Risk-On Shift
July’s U.S. Consumer Price Index (CPI) data showed inflation holding steady at 2.7% year-over-year, pushing the odds of a September Fed rate cut to 92% in futures markets. Lower rates historically boost appetite for risk assets — a dynamic that could benefit altcoins in particular.
Bitcoin Dominance Hits 6-Month Low
A major driver behind altseason speculation is the drop in Bitcoin dominance — BTC’s share of total crypto market capitalization.
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BTC dominance has fallen about 10% since May 2025, from over 65% to roughly 59% in August.
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This is the lowest level since January 2025, suggesting capital is beginning to rotate into altcoins.
Crypto trader Ito Shimotsuma noted that Bitcoin dominance has formed its first monthly bearish cross since January 2021 — a technical setup that previously preceded a four-month altcoin rally.
Altcoin Indexes Trending Up but Not Yet in ‘Season’ Territory
Despite a 50% surge in altcoin market cap since early July, altcoin season indexes remain below the 75 threshold Coinbase uses as a benchmark.
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CoinMarketCap’s Altcoin Season Index: 44 (up from below 25 in July)
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Blockchain Center’s Index: 53 (neutral)
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CryptoRank’s Index: 50
Duong attributed the divergence between market cap growth and altseason index levels to rising institutional interest in Ethereum and related narratives, including digital asset treasuries and stablecoin adoption.
Waiting for the Next Big Catalyst
Joanna Liang, founding partner at Singapore-based VC firm Jsquare, said three conditions must align for a true altseason:
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Supportive macroeconomic backdrop
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Declining Bitcoin dominance
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A strong new market narrative
She noted that past altseasons were driven by clear catalysts — ICOs in 2017–2018, Layer-1 blockchains in 2018–2019, and DeFi/NFTs in 2021–2022.
“In this cycle, the market is still waiting for a compelling primary-market signal that can draw significant new capital and truly ignite an altseason,” Liang said.
With macro conditions shifting and BTC dominance declining, Coinbase believes the stage is set for altcoins to outperform — but the ultimate spark may depend on the next big market narrative.
