The recent decline in Bitcoin dominance is being read by some analysts as a precursor to a major altseason. Crypto analyst Merlijn the Trader posted on X that the “crash signal” for BTC dominance has returned, noting similar setups in 2017 and 2021 that preceded explosive altcoin rallies and later deep drawdowns.
Merlijn’s message summarized the pattern: BTC.D peaked, altcoins exploded, then many lost most of their gains. He pointed out that Bitcoin dominance topped above 65% earlier this year and has been sliding, now trading just under 60%. Historically, dominance fell from about 65% to 35% after the 2017 peak (fueling 2018 alt gains) and dropped from roughly 70% to 40% in 2021, enabling 10x+ moves in some altcoins before 80%+ retracements.
That history is why many traders watch BTC.D closely: a significant move down often accompanies a broad rotation of capital into altcoins. Optimists believe a renewed drop could bring fresh capital and revitalize a moribund alt market. Pessimists warn the current weakness among many top alts — most have not made new all-time highs this cycle (aside from ETH and BNB) — means any rally might be muted or short-lived.
This cycle’s unfolding differs from prior ones. In earlier altseasons, large altcoins rallied hard against Bitcoin, increasing their share by outperforming BTC. So far this year, many altcoins have been trying to catch up to Bitcoin rather than leading a rotation away from it. That divergence fuels doubt: will a genuine altseason materialize, or will history fail to repeat in the same way?
Traders say the coming months will be decisive. If BTC dominance continues to fall and alts begin sustained outperformance, a broad altseason could follow — potentially delivering big short-term gains but also risking sharp subsequent corrections. Conversely, if alts remain unable to spark and only chase BTC, the long-term notion of recurring four-year cycles could face fresh scrutiny.
