- Altcoin Season Index dips below 20%, signaling a sharp retreat and Bitcoin’s dominance following a brief altcoin rally in early 2025.
- Institutional pullback in Web3 funding highlights reduced risk appetite, with Q2 2025 marking the lowest venture funding since 2019.
- Historical patterns show June as a pivot for altcoins, but BTC rallies and low liquidity may limit broader altcoin momentum this cycle.
Altcoin performance continues to trail Bitcoin, with the Altcoin Season Index falling below 30% in early June 2025. This drop places the market back into “Bitcoin Season,” after a brief euphoria phase in Q1 where altcoins temporarily outpaced BTC.
Bitcoin Regains Market Control as Altcoin Index Retreats
According to a post by Alphractal, the current Altcoin Season Index reads just under 20%, reflecting a sharp retreat from the 90 %+ levels seen earlier this year. That previous surge marked a period of altcoin euphoria driven by Bitcoin’s rally beyond $100,000. However, the steep decline now indicates a shift in momentum.
Alphractal noted that “the disappointment for many investors this cycle has been the underperformance of altcoins,” particularly those over five years old, many of which failed to reach new all-time highs. While some altcoins showed signs of rotation in early June, only 13 out of 56 are currently outperforming BTC on a 60-day basis.
2025 Funding Trends Show Divergence in Risk Appetite
A dramatic funding pullback is also influencing sentiment across the crypto sector. Q2 2025 marks the lowest Web3 venture funding since 2019, in contrast to the $3.8 billion raised in Q1. This reduction suggests a significant contraction in institutional appetite for altcoin-centric projects.
Notably, past altcoin surges, especially in 2021, coincided with peak investment cycles. That year saw quarterly Web3 funding top $8 billion consistently, fueling massive altcoin rallies. The divergence between early 2025 optimism and current funding levels may signal caution ahead for altcoin investors.
Historical Cycles Indicate June as a Pivot Point
Interestingly, Alphractal points out a recurring pattern: since 2022, every June has marked the start of an altcoin season. While the Altcoin Season Index remains in a low zone, the transition from sub-10% levels to current readings may indicate brewing rotation toward alternative assets.
Still, historical patterns also highlight that strong Bitcoin rallies often precede or follow short-lived altcoin phases. In each prior cycle, Bitcoin’s strength suppressed broader altcoin momentum unless accompanied by wider liquidity inflows.
Altcoin Pair Trends and On-Chain Activity Remain Critical
Alphractal emphasizes that altcoin seasons are often confirmed by more than price action. On-chain wallet movement, BTC pair strength, and DEX volume remain essential indicators. Moreover, altcoins showing resilience during BTC retracements tend to lead short rallies.
In addition, capital inflow into blockchain infrastructure, AI-integrated tokens, and real-world asset platforms appears to play a role in identifying early sector rotations. As of now, these sectors remain underrepresented in current fund allocations and spot activity.
