Emre Yumlu 
The recent volatility in the crypto market has sparked fresh debates about whether a genuine altcoin season is underway. A notable surge in capital flowing into lower market cap tokens was quickly followed by sharp corrections—raising questions about the sustainability of the rally.
Altcoin Seasonal Index Slips Amid Rising Doubts
The Altcoin Seasonal Index, which measures how altcoins are performing relative to Bitcoin on a scale of 0 to 100, offered early signs of optimism. The index climbed to 59 on Monday, hinting at potential momentum. However, by Friday, it had dropped to 41—reflecting growing uncertainty among investors.
This shift signals that the recent bullish sentiment surrounding altcoins may have been premature or short-lived, especially given the market’s fragile state.
Coinbase Research: Excessive Leverage Behind the Pullback
According to David Duong, Head of Research at Coinbase, the market’s latest downturn has less to do with fundamentals and more with risk management. Since April, the size of the altcoin market—excluding stablecoins—has nearly doubled. But many investors were caught overexposed in highly leveraged long positions.
One key indicator highlighted by Duong is the Altcoin Open Interest Dominance, which rose to 1.6. This metric compares the dollar value of open interest in altcoin futures versus Bitcoin futures. Historically, a spike in this ratio has often preceded sharp market corrections.
Duong emphasized that a drop in this metric would signal healthy deleveraging, while a continued rise could lead to further market volatility.
Bitcoin Dominance Drops Below Key Threshold
A critical factor for the continuation of altcoin momentum is the Bitcoin Dominance metric, which reflects Bitcoin’s share of the overall crypto market. Notably, this figure has dipped below its 200-day moving average—something that hasn’t occurred since January 2025.
According to Duong, “A sustained move below the 200-day average could be the technical confirmation of an altcoin season.” He added that such drops in the past have often preceded weeks-long altcoin rallies, such as in 2021. However, he also cautioned that more daily closes below this level are needed before drawing firm conclusions.
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