Altcoin Season’s Hypothetical Timeline Revealed

A True Run Higher May Yet to Begin

Bitcoin (BTC) is fighting for control of the $100k level, giving altcoins some space to trend higher. This is typical during a bull run, where Bitcoin’s upward movement can cause altcoins to stagnate, and vice versa. This pattern aligns well with the concept of capital rotation in the crypto market.

The altcoin season index indicates it has been altcoin season for nearly two weeks, but the reading has already dropped to 71 as of press time. However, this decline does not suggest the cycle is over or that it’s time to sell.

Altcoin Season Timeline and Fuel Drivers

Stablecoins are essential for the crypto ecosystem, providing a stable refuge from volatility, enhancing market liquidity, and enabling decentralized finance (DeFi) activities. An increase in stablecoin inflows to exchanges signals bullish market conditions and increased buying power. For example, Tether (USDT) reserves have surged over the past three months.

Reviewing the market run of 2020-21, we note that growing Tether reserves coincided with a robust altcoin season. Minting stablecoins and transferring them to exchanges boosts liquidity and facilitates transactions, serving as resources for major buyers.

The February 2021 increase in Tether reserves resembled the trends observed in recent months, indicating that the real altcoin season might still be on the horizon. Historical data suggests that significant altcoin lift-offs occurred in May and November 2021; this pattern may recur in Q2 and Q4 of 2025.

Market Capitalization Targets for 2025

After peaking in 2018, the altcoin market cap (excluding Ethereum) reached approximately $1.12 trillion in 2021, surpassing the 223.6% extension level. Based on the 2021 trends, AMBCrypto estimates the 2025 target for the altcoin market cap at the same extension level to be $3.47 trillion.

If the previous cycle holds, this market cap target could be met in the next ten months. Following the U.S. tax season ending in April, any tax-related selling is expected to decrease, with participants likely re-entering the market as buyers, potentially driving prices up by early summer.

The adage “Sell in May, walk away” holds true for cryptocurrency as well. While relying strictly on historical trends may not be advisable due to varying summer returns, investors should consider selling a portion of their holdings in May and November while keeping an eye on long-term price movements.