Analysts Predict Delayed Altcoin Season Amid Bitcoin’s Dominance and Institutional Influence

​Analysts suggest that an altcoin season is unlikely in the near future due to several factors, including the Federal Reserve’s cautious stance, macroeconomic uncertainties, and insufficient liquidity drivers.​

Matrixport analysts highlight that Ethereum’s dominance has declined nearly 50% since the launch of the U.S. Ethereum spot ETF, which failed to reignite sustained interest in the altcoin market. This decline has led to altcoins following a “pump and dump” pattern, lacking sustained upward momentum .​

To revive the altcoin market, analysts identify three necessary catalysts:​

Dovish Federal Reserve Policies: Interest rate cuts could provide a more favorable environment for risk assets like altcoins.​

Growth in Stablecoin Issuance: An increase in stablecoin issuance reflects improving micro-level liquidity, which is essential for altcoin markets.​

Macro Liquidity Drivers: Factors such as increased credit or government stimulus programs could inject liquidity into the market, supporting altcoin growth.​

Currently, the market lacks these supportive conditions. The Federal Reserve’s cautious approach, ongoing macroeconomic uncertainties, and limited liquidity drivers contribute to the subdued altcoin market.​

Despite these challenges, there are signs of growth in the stablecoin sector. The market caps of leading stablecoins like Tether (USDT) and USD Coin (USDC) have seen substantial growth over the past eight months, suggesting that liquidity is still moving into crypto amid macroeconomic uncertainty .​

In summary, while the altcoin market faces challenges due to macroeconomic factors and liquidity constraints, the growth in stablecoin issuance indicates potential for future market expansion. However, a significant altcoin season is unlikely without favorable macroeconomic conditions and increased liquidity drivers.