bitcoin has seen a sharp drop this month, accompanied by a drop in its dominance rate, the share of BTC market capitalization relative to the total cryptocurrency market.
A lower dominance rate is often interpreted as investors abandoning bitcoins and opting for altcoins, fueling speculation about the arrival of an “alt season.”
However, analysts caution that this drop does not necessarily indicate a simple rotation. Rather, many see the market as undergoing a reset, a broader realignment rather than a simple shift from BTC to altcoins.
According to analysts, price data, cross-pair performance, and on-chain activity point to a steady deleveraging cycle rather than the early stages of an altcoin season.
BTC has fallen almost sixteen percent over the past month, according to market data from CoinDesk, with its dominance rate falling from 61.4% to 58.9%. Tokens like ether , , and sunny have recorded deeper losses.
XRP/BTC is one of the few pairs showing significant strength, while ETH/BTC has fallen only modestly, indicating selective resilience rather than a broad change in leadership. The market is absorbing a leverage increase that began with the October sell-off rather than moving into a risk rotation.
“Bitcoin’s decline this month reflects a general deleveraging that began with the October sell-off. Since then, the market has been falling as leverage is removed,” Rohit Apte, head of markets at Hex Trust, told CoinDesk in an interview on Telegram.
Apte says we are not in an altcoin season yet, as most altcoins have underperformed bitcoin and ether on a relative basis.
“For any sustainable rotation towards alternatives, we would first need to see the majors stabilize and establish price consolidation,” he continued.
On-chain metrics reinforce this picture.
Blockscout data provided to CoinDesk shows that the Ethereum ecosystem is active but not overheated.
Base stands out as the current hotspot, processing approximately nineteen million transactions per day and seeing an increase in token creation driven by Coinbase’s Launchpad and Smart Wallet tools, according to data curated by Blockscout. Other major networks, including Optimism, Arbitrum, Polygon, and Celo, are stable and handle millions of daily transactions without an increase in fees.
This backdrop suggests that the market is neither struggling nor entering the type of speculative fever that typically drives an altcoin cycle. A true altcoin season tends to coincide with rising fees, visible chain congestion, and a big jump in activity on multiple networks at once.
Right now, traders appear to be reducing exposure without aggressively rotating into higher beta assets, a sign that caution remains the dominant sentiment.
Until BTC and ETH settle into a firmer range, it looks like the market will veer sideways rather than embrace the kind of momentum that drives a true alt-season.
