Still need to wait! The real alt season "this time" will come, what are the key narratives

Image source: Plain Language Blockchain

Bitcoin broke the $100,000 mark last week, undoubtedly a historic milestone. However, as this leading cryptocurrency celebrates its achievement, many altcoins have already begun to outperform Bitcoin, indicating the arrival of the altcoin season.

Since the beginning of the year, 20 of the top 50 cryptocurrencies by market capitalization have seen gains of more than 124% - a figure that exceeds Bitcoin's remarkable increase. The rise in the market capitalization of altcoins, increased media attention, and the climbing Altcoin Season Index further confirm this trend. In addition, a recent report from CCData indicates that trading volume in November reached a new high for the year, and open interest also hit a historical record. These signs suggest that market risk appetite is on the rise. Such changes are generally more favorable for altcoins, as they have higher potential for returns.

On a deeper level, investing in altcoins is actually investing in Web3 and other blockchain-related industries. This industry relies heavily on regulatory clarity, which has become more optimistic after the US election. In addition, according to the latest data from CryptoQuant, the trading volume of altcoins is not driven by Bitcoin trading pairs. This means that the market is experiencing real growth, rather than just a rotation of assets from Bitcoin to altcoins. This may also mean that this altcoin season no longer waits for Bitcoin price consolidation, but may see simultaneous rise in both types of cryptocurrencies.

The rebound of altcoins since November seems to foreshadow a larger-scale altcoin season in 2025. Emerging crypto trends and technologies may attract institutional investors and venture capitalists. The following is speculation on the potential and key narratives of the next altcoin season based on on-chain data and other trends.

1. The season of altcoins is not just about the price.

The altcoin season is usually defined as the phase when altcoins continue to outperform Bitcoin. This phase often occurs in the last year of the four-year cycle of Bitcoin. When the market enthusiasm spreads from Bitcoin to other currencies, large-cap altcoins will re-approach or surpass their historical highs, and a new narrative will drive mid- and small-cap currencies to break through unknown highs. Ultimately, this phase will climax due to widespread FOMO (fear of missing out) emotions, pushing the entire crypto market into an overheated state. This overheating typically signals an impending market correction and ultimately enters a bear market cycle.

However, the altcoin season is not only related to prices, but also represents the comprehensive evolution of market activities, application popularity, and innovation. So far, each altcoin season has reflected unique technological changes and market trends.

The first round of altcoin season in 2017 was marked by the ICO craze and the rise of NFTs (remember CryptoKitties?). The second round of altcoin season in 2021 has integrated the rise of DeFi with the widespread explosion of NFTs and gaming craze. To support these developments, cheaper and more scalable Layer2 solutions have also emerged. All these innovations have withstood the test of the crypto winter and continue to develop to this day.

Looking ahead, the third round of altcoin season in 2025 is expected to bring new narratives and technologies, some of which are already in development, while others have yet to emerge.

2. The Indicator of Altcoin Season

Multiple indicators indicate that the altcoin season is coming. Bitcoin's dominance is declining, and altcoins are outperforming Bitcoin, with their market value also reaching new highs. However, the Altcoin Season Index and other related indicators suggest that the peak of the altcoin season may not have arrived yet.

From an absolute value perspective, the total market value of altcoins, calculated by subtracting the market value of Bitcoin from the total market value of the cryptocurrency market, has reached a new all-time high. According to Coingecko data, the current market value is 1.89 trillion US dollars, surpassing the previous peak of 1.79 trillion US dollars set in November 2021. From a relative value perspective, the dominance of Bitcoin has decreased from 60% to 51% since November.

However, both of these indicators include stablecoins and packaged assets. Although they are crucial for market liquidity, they may not necessarily reflect the development of the altcoin market. In addition, under bullish conditions, these assets tend to lean towards altcoins due to their higher risk-reward characteristics.

To assess the market more objectively, the Altcoin Season Index of the Blockchain Center excludes stablecoins and packaged assets. The index defines the altcoin season as a period in the past 90 days when over 75% of the top 50 altcoins outperformed Bitcoin. Recently, this index surpassed the 75% threshold on December 2nd and remained above it for a week. In the previous altcoin season, the index stayed above the threshold for nearly three months. This supports the view that the peak of the altcoin season may occur in 2025.

Image Source: BlockChain

The OTHERS index, calculated by platforms such as TradingView, is another important indicator for evaluating the performance of altcoins. The index tracks the total market value of the cryptocurrency market after excluding the top ten currencies (including the two largest stablecoins). Although the index has risen by 123% in the past 30 days (followed by a pullback), it has not yet reached its previous highs. The last time it rose by 525% from its historical high in 2017, indicating that there is still considerable room for growth.

Image Source: TradingView

Finally, Google Trends also reflects people's interest in altcoins. Peaking in May 2021 with an index of 100, the current search volume has risen to 87, its highest level since then.

3. The Key Narrative of 2025 Altcoins

By 2024, three of the top 50 altcoins are meme coins: Dogwifhat ($WIF +2,027%), $PEPE (+1,764%), and Dogecoin ($DOGE +382%). While meme coins are often a symbol of the altcoin season, they are unlikely to define the mainstream narrative of the crypto market in 2025.

According to the data from the Blockchain Center, among the emerging new technologies in 2023-2024, BRC-20Token performed the best. Although some do not consider it a true altcoin, these tokens based on the Bitcoin blockchain have risen by over 1,000% within the year, leveraging technologies like Ordinals or Runes. In the more traditional altcoin category, RWAs (Tokenization of Real World Assets) leads with an annual growth rate of 717%, including tokenized versions of real world assets and their supporting protocols. Following closely are tokens related to artificial intelligence (+513%) and DePIN (Decentralized Physical Infrastructure, +303%).

Image source: BlockChain

By 2025, new narratives are likely to emerge, and the trends in venture capital may reveal the most promising directions. According to Pitchbook data, venture capital in the crypto industry performed relatively modestly in 2023 (US$10 billion), accumulating to US$7.1 billion in the third quarter of 2024. Next year, activity may rebound to the levels of 2021 and 2022, reaching US$25.3 billion and US$29.4 billion, respectively. This capital growth will flow into specific projects and broader industries, driving the next wave of growth.

Finally, please note that in the frenzy of the altcoin season, it is important to avoid being caught up in market speculation. Every bull market ultimately ends with a correction (becoming a bear market), and only tokens with strong fundamentals and practical use cases can survive in the next cycle.

[Disclaimer] There are risks in the market, and investment needs to be cautious. This article does not constitute investment advice, users should consider whether any opinions, views, or conclusions in this article are appropriate for their specific situation. Investing based on this, at your own risk.

This article is authorized for reproduction from: 'Foresight News'

Original Author: Marie Poteriaieva

Wait a little longer! The true altcoin season 'this time' will come, what are the key narratives. This article was first published in 'Crypto City'.