If you're wondering, "Wen Alt Season?", you are in good company. Even Bitcoin Maxis recognize the fact that Alt Season creates opportunities for big gains. As we try to read the tea leaves and gain insight about developing trends we always look at historical data, but it's important to recognize when market dynamics are changing. In this analysis, I took a deep dive into the dynamic relationship between BTC price relative to BTC Dominance (BTC.D), TOTAL3 (Crypto Market Cap Excluding BTC & ETH), and USDT Dominance (USDT.D). With a little help from AI, I looked all the way back to 2017 when the TOTAL3 index was created, and compared the dynamic relationship between the different cohorts mentioned above to gain insight about how we used to be able to determine when Alt Season was developing between 2017 - early 2024, vs how things appear to be developing in this cycle.
Here's what I discovered:
1. BTC.D vs. TOTAL3: The Alt Season Divergence Signal
The traditional Alt Season Indicator has been the divergence between BTC.D and TOTAL3:
BTC.D falling while TOTAL3 rises → Capital rotation from Bitcoin into altcoins, a strong sign of Alt Season.
BTC.D rising while TOTAL3 declines → Bitcoin dominance increases, often during BTC-led bull runs or altcoin capitulation.
BTC.D and TOTAL3 rising together → Broad market growth with Bitcoin leading.
BTC.D and TOTAL3 falling together → Market-wide risk-off sentiment, typically during strong BTC sell-offs.
2017-2021 Cycle (Pre-Maturity Phase)
The relationship was highly cyclical, with clear boom-and-bust rotations.
Late 2017 Alt Season: BTC.D dropped dramatically as TOTAL3 skyrocketed. This was the classic alt season fueled by ICOs, and it was very easy to see it developing.
2018-2019 Bear Market: BTC.D rebounded aggressively as altcoins collapsed. TOTAL3 erased nearly all gains.
2020-2021 DeFi/NFT Boom: Another clear BTC.D vs. TOTAL3 divergence was seen in mid-to-late 2020 when DeFi and NFT narratives caused altcoins to rally independently of BTC.
2022-Present Cycle (Maturing Market)
As institutional money, and more importantly, seasoned institutional fund managers, have started scaling into the crypto market, we are seeing changes in the dynamic relationship between the cohorts that indicates that the market is maturing.
The divergence signal has weakened slightly because of increasing institutional adoption of BTC and ETH. TOTAL3 has had a harder time breaking away from Bitcoin trends, meaning Alt Seasons are more dependent on BTC stability rather than independent surges.
Late 2022-Present: Since bottoming out around the FTX crash in November 2022Bitcoin dominance (BTC.D) has been on an uptrend, showing that capital is concentrating in BTC, with fewer dramatic rotations into altcoins.
TOTAL3 is still climbing, but not as aggressively as in past cycles relative to BTC.D.
✅ Key Takeaway:
1. Altcoin markets no longer break away from BTC as sharply as before.
Alt Seasons still exist but require a stable or slightly declining BTC.D, whereas before, a sharp BTC.D decline almost guaranteed an altcoin explosion.
2. The Role of USDT.D in Spotting Alt Seasons
USDT.D (Tether Dominance) tracks the percentage of the total crypto market cap held in USDT stablecoins. Historically:
High USDT.D (rising) → Traders moving into stablecoins, risk-off sentiment.
Low USDT.D (declining) → Traders deploying stablecoin capital into BTC and altcoins, risk-on sentiment.
2017-2021: USDT.D as a Contrarian Alt Season Signal
A spike in USDT.D was often a precursor to an Alt Season because smart money used USDT to accumulate altcoins at market bottoms.
When USDT.D dropped, TOTAL3 rose, showing that liquidity was moving from stablecoins into alts.
2022-Present: USDT.D as a Risk Appetite Gauge
USDT.D no longer functions as a leading indicator for Alt Season the way it did before.
Instead, it serves as a confirmation signal:
If BTC.D is dropping and TOTAL3 is rising, but USDT.D remains high → Alt Season is weak or delayed.
If BTC.D is dropping, TOTAL3 is rising, and USDT.D is falling → Strong altcoin rally confirmation.
✅ Key Takeaway:
USDT.D used to be a contrarian indicator for alt accumulation (spikes meant smart money was waiting).
Now, USDT.D is better used as a confirmation signal to assess if liquidity is actually flowing into alts or if traders are staying in stablecoins.
Best Indicators for Identifying an Alt Season
Given the changing nature of the crypto market, the best indicators for spotting an Alt Season now are:
1️⃣ Primary Indicator: BTC.D vs. TOTAL3 Divergence
Most reliable leading signal for Alt Season.
Ideal scenario: BTC.D trending lower while TOTAL3 rises → Altcoins outperform BTC.
2️⃣ Secondary Indicator: USDT.D Declining
Confirms that capital is leaving stablecoins and being deployed into altcoins.
Ideal scenario: USDT.D dropping while TOTAL3 rises → Stronger altcoin rally.
3️⃣ Additional Market Conditions to Watch:
Bitcoin stability: If BTC is too volatile, capital stays in BTC or stablecoins, limiting Alt Season potential.
ETH performance: A strong ETH/BTC pair often foreshadows broader altcoin strength.
✅ Current 2025 Outlook for Alt Season:
BTC.D has recently spiked well above 60%, meaning Bitcoin remains dominant, however, it has rolled off those recent highs and is searching for support.
TOTAL3 rose sharply after election day (Nov 5th) and many alts realize triple digit gains, but BTC.D and Bitcoin price rose with it. There simply was no divergence between BTC.D and TOTAL3 which made it a market wide rally rather than what most consider a classic Alt Season scenario. We are currently seeing a divergence where BTC.D has spiked and TOTAL3 has fallen sharply since mid-January 2025, but just as BTC.D is searching for support, so is TOTAL3. This is an indication that altcoins may be capitulating. While that may not point to an Alt Season in the classic sense, it does indicate that altcoin traders should be looking for setups because the vast majority of altcoins endured major corrections (40% - 70%) after the post election rally, and many of those have already retested support or are the process of doing so → Suggests altcoin capitulation that could develop into something more, but the spike in BTC.D is a clear sign that this is not Alt Season yet. We must wait to see if this bounce from TOTAL3 ends up confirming as support and look for the divergence between TOTAL3 and BTC.D to develop. The fact that USDT.D remains somewhat elevated → Liquidity isn’t fully deployed into alts yet, however, similar to BTC.D, it too has rolled off of it's highs and seems to be moving back towards it's recent consolidation range.
📌 Conclusion: If support for TOTAL3 holds at this level and the index moves higher, that would be an indication that Altcoin season conditions are developing. This clearly is NOT confirmed yet. Watch for BTC.D and USDT.D both to decline further for a stronger rotation into alts.
Final Summary
Alt Season indicators have evolved since 2017.
BTC.D vs. TOTAL3 divergence remains the best signal, but rotations are less extreme than in prior cycles.
USDT.D’s role has changed.
Used to be a leading indicator (spikes meant accumulation)
Now, it serves as a confirmation signal (declining USDT.D validates altcoin strength).
Current Market Setup (2025)
At the time of writing BTC.D is declining, but remains above 61%, meaning Bitcoin is still dominant, however, BTC price is sliding back in search of support.
TOTAL3 bounced briefly, but is once again searching for support
USDT.D just started climbing again, suggesting caution.
The fact that BTC price and TOTAL3 are declining simultaneously is a sign that money is rotating into stable coins, but it's important to note that this always resolves itself after support tests are complete and money rotates back into BTC and altcoins.
While this gives us no evidence that we are on the cusp of an Alt Season, we may be seeing retests of support from the December capitulation developing, or possibly even a deeper capitulation for some coins before we see a rebound. If you are inclined to take advantage of the opportunities that are developing, now is the time to identify the assets and the price targets that meet your criteria.
With the growing institutional influence on the market, it may be time to stop sh!tcoining and turn your focus to altcoins with stronger fundamentals with a dollar cost averaging strategy to build your position. A full-fledged Alt Season will requires a further drop in BTC.D and USDT.D alongside a divergent spike from TOTAL3.
🔎 Key Levels to Watch for Alt Season Confirmation:
✅ BTC.D breaking below 58% (used to be 50%)
✅ TOTAL3 accelerating above $1 Trillion
✅ USDT.D dropping below 3.5%
🚀 If these conditions align, we could see the strongest Alt Season since 2021. Until they do, focus on quality.
Not financial advice.
Here's what I discovered:
1. BTC.D vs. TOTAL3: The Alt Season Divergence Signal
The traditional Alt Season Indicator has been the divergence between BTC.D and TOTAL3:
BTC.D falling while TOTAL3 rises → Capital rotation from Bitcoin into altcoins, a strong sign of Alt Season.
BTC.D rising while TOTAL3 declines → Bitcoin dominance increases, often during BTC-led bull runs or altcoin capitulation.
BTC.D and TOTAL3 rising together → Broad market growth with Bitcoin leading.
BTC.D and TOTAL3 falling together → Market-wide risk-off sentiment, typically during strong BTC sell-offs.
2017-2021 Cycle (Pre-Maturity Phase)
The relationship was highly cyclical, with clear boom-and-bust rotations.
Late 2017 Alt Season: BTC.D dropped dramatically as TOTAL3 skyrocketed. This was the classic alt season fueled by ICOs, and it was very easy to see it developing.
2018-2019 Bear Market: BTC.D rebounded aggressively as altcoins collapsed. TOTAL3 erased nearly all gains.
2020-2021 DeFi/NFT Boom: Another clear BTC.D vs. TOTAL3 divergence was seen in mid-to-late 2020 when DeFi and NFT narratives caused altcoins to rally independently of BTC.
2022-Present Cycle (Maturing Market)
As institutional money, and more importantly, seasoned institutional fund managers, have started scaling into the crypto market, we are seeing changes in the dynamic relationship between the cohorts that indicates that the market is maturing.
The divergence signal has weakened slightly because of increasing institutional adoption of BTC and ETH. TOTAL3 has had a harder time breaking away from Bitcoin trends, meaning Alt Seasons are more dependent on BTC stability rather than independent surges.
Late 2022-Present: Since bottoming out around the FTX crash in November 2022Bitcoin dominance (BTC.D) has been on an uptrend, showing that capital is concentrating in BTC, with fewer dramatic rotations into altcoins.
TOTAL3 is still climbing, but not as aggressively as in past cycles relative to BTC.D.
✅ Key Takeaway:
1. Altcoin markets no longer break away from BTC as sharply as before.
Alt Seasons still exist but require a stable or slightly declining BTC.D, whereas before, a sharp BTC.D decline almost guaranteed an altcoin explosion.
2. The Role of USDT.D in Spotting Alt Seasons
USDT.D (Tether Dominance) tracks the percentage of the total crypto market cap held in USDT stablecoins. Historically:
High USDT.D (rising) → Traders moving into stablecoins, risk-off sentiment.
Low USDT.D (declining) → Traders deploying stablecoin capital into BTC and altcoins, risk-on sentiment.
2017-2021: USDT.D as a Contrarian Alt Season Signal
A spike in USDT.D was often a precursor to an Alt Season because smart money used USDT to accumulate altcoins at market bottoms.
When USDT.D dropped, TOTAL3 rose, showing that liquidity was moving from stablecoins into alts.
2022-Present: USDT.D as a Risk Appetite Gauge
USDT.D no longer functions as a leading indicator for Alt Season the way it did before.
Instead, it serves as a confirmation signal:
If BTC.D is dropping and TOTAL3 is rising, but USDT.D remains high → Alt Season is weak or delayed.
If BTC.D is dropping, TOTAL3 is rising, and USDT.D is falling → Strong altcoin rally confirmation.
✅ Key Takeaway:
USDT.D used to be a contrarian indicator for alt accumulation (spikes meant smart money was waiting).
Now, USDT.D is better used as a confirmation signal to assess if liquidity is actually flowing into alts or if traders are staying in stablecoins.
Best Indicators for Identifying an Alt Season
Given the changing nature of the crypto market, the best indicators for spotting an Alt Season now are:
1️⃣ Primary Indicator: BTC.D vs. TOTAL3 Divergence
Most reliable leading signal for Alt Season.
Ideal scenario: BTC.D trending lower while TOTAL3 rises → Altcoins outperform BTC.
2️⃣ Secondary Indicator: USDT.D Declining
Confirms that capital is leaving stablecoins and being deployed into altcoins.
Ideal scenario: USDT.D dropping while TOTAL3 rises → Stronger altcoin rally.
3️⃣ Additional Market Conditions to Watch:
Bitcoin stability: If BTC is too volatile, capital stays in BTC or stablecoins, limiting Alt Season potential.
ETH performance: A strong ETH/BTC pair often foreshadows broader altcoin strength.
✅ Current 2025 Outlook for Alt Season:
BTC.D has recently spiked well above 60%, meaning Bitcoin remains dominant, however, it has rolled off those recent highs and is searching for support.
TOTAL3 rose sharply after election day (Nov 5th) and many alts realize triple digit gains, but BTC.D and Bitcoin price rose with it. There simply was no divergence between BTC.D and TOTAL3 which made it a market wide rally rather than what most consider a classic Alt Season scenario. We are currently seeing a divergence where BTC.D has spiked and TOTAL3 has fallen sharply since mid-January 2025, but just as BTC.D is searching for support, so is TOTAL3. This is an indication that altcoins may be capitulating. While that may not point to an Alt Season in the classic sense, it does indicate that altcoin traders should be looking for setups because the vast majority of altcoins endured major corrections (40% - 70%) after the post election rally, and many of those have already retested support or are the process of doing so → Suggests altcoin capitulation that could develop into something more, but the spike in BTC.D is a clear sign that this is not Alt Season yet. We must wait to see if this bounce from TOTAL3 ends up confirming as support and look for the divergence between TOTAL3 and BTC.D to develop. The fact that USDT.D remains somewhat elevated → Liquidity isn’t fully deployed into alts yet, however, similar to BTC.D, it too has rolled off of it's highs and seems to be moving back towards it's recent consolidation range.
📌 Conclusion: If support for TOTAL3 holds at this level and the index moves higher, that would be an indication that Altcoin season conditions are developing. This clearly is NOT confirmed yet. Watch for BTC.D and USDT.D both to decline further for a stronger rotation into alts.
Final Summary
Alt Season indicators have evolved since 2017.
BTC.D vs. TOTAL3 divergence remains the best signal, but rotations are less extreme than in prior cycles.
USDT.D’s role has changed.
Used to be a leading indicator (spikes meant accumulation)
Now, it serves as a confirmation signal (declining USDT.D validates altcoin strength).
Current Market Setup (2025)
At the time of writing BTC.D is declining, but remains above 61%, meaning Bitcoin is still dominant, however, BTC price is sliding back in search of support.
TOTAL3 bounced briefly, but is once again searching for support
USDT.D just started climbing again, suggesting caution.
The fact that BTC price and TOTAL3 are declining simultaneously is a sign that money is rotating into stable coins, but it's important to note that this always resolves itself after support tests are complete and money rotates back into BTC and altcoins.
While this gives us no evidence that we are on the cusp of an Alt Season, we may be seeing retests of support from the December capitulation developing, or possibly even a deeper capitulation for some coins before we see a rebound. If you are inclined to take advantage of the opportunities that are developing, now is the time to identify the assets and the price targets that meet your criteria.
With the growing institutional influence on the market, it may be time to stop sh!tcoining and turn your focus to altcoins with stronger fundamentals with a dollar cost averaging strategy to build your position. A full-fledged Alt Season will requires a further drop in BTC.D and USDT.D alongside a divergent spike from TOTAL3.
🔎 Key Levels to Watch for Alt Season Confirmation:
✅ BTC.D breaking below 58% (used to be 50%)
✅ TOTAL3 accelerating above $1 Trillion
✅ USDT.D dropping below 3.5%
🚀 If these conditions align, we could see the strongest Alt Season since 2021. Until they do, focus on quality.
Not financial advice.
Here's to trading smarter!
Keith Alan
Keith Alan
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Here's to trading smarter!
Keith Alan
Keith Alan
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.