The cryptocurrency market is experiencing a significant shake-up, with a sharp sell-off in altcoins over the past few days casting a shadow of doubt over the recent "altcoin season" narrative. While bitcoin (BTC) saw a modest decline, a number of major altcoins have experienced a much more pronounced downturn.
XRP, dogecoin (DOGE), and Solana's SOL were among the hardest hit of the top 10 cryptocurrencies, each falling around 5% over the past 24 hours. From their mid-week highs, XRP and DOGE have plunged approximately 18%, while SOL is down 12%. This broad-based weakness is further reflected in the CoinDesk 80 Index, which tracks mid-cap tokens, as it has lost 10% from its weekly peak.
In contrast, bitcoin (BTC) has been more resilient, trading around $116,000, which is just over 3% lower than its mid-week peak of $120,000. Ethereum (ETH) has also held up relatively well, sitting about 4% below its weekly high, supported by steady accumulation from firms with crypto treasury strategies.
The recent altcoin sell-off follows weeks of heavy capital rotation into smaller tokens, which had fueled optimism about a full-blown "alt season." This period, characterized by altcoins outperforming bitcoin for a sustained period, seemed to be gaining traction. CoinGlass's Altcoin Season Index, which measures this outperformance, has since cooled off to 41, down from a recent high of 59 earlier this week.
According to a report from Coinbase's head of research, David Duong, the pullback can be attributed to traders taking on excessive leverage in their altcoin bets. The Altcoin Open-Interest Dominance metric, which compares the value of altcoin derivatives contracts to bitcoin's, had soared to 1.6—a level that has historically preceded market shake-outs. A decrease in this ratio would indicate a healthy deleveraging of the altcoin market, while a sustained high level could signal more volatility ahead.
For those still hoping for an extended altcoin season, analysts suggest keeping a close eye on Bitcoin Dominance, a metric that measures BTC's share of the total crypto market capitalization. The metric has recently broken below its 200-day moving average for the first time in months. A sustained move below this technical level could "validate the 'alt season' narrative," as it has historically preceded multi-week stretches of altcoin outperformance, such as in 2021. However, some analysts recommend waiting for a few more consecutive sessions to close below this level for a more "prudent positioning" before committing to a full-on altcoin strategy.
July 2025, Cryptoniteuae