Altcoin Season Has Not Yet Arrived, but Market Participants Are Watching Closely as Bitcoin Falters

NOIDA (CoinChapter.com) — Altcoin season has not yet arrived, but market participants are watching closely as Bitcoin falters under global pressure. After peaking

Despite a strong start to the year, Bitcoin (BTC) price faltered in April as global pressure mounted, halting any serious moves in altcoins.

After peaking at $110,000 in early 2025, Bitcoin price pulled back to nearly $84,000 by April 1. This selloff occurred amid escalating geopolitical tensions, which sparked renewed trade war fears.

President Donald Trump’s recent U.S. tariff announcements targeting Chinese and Mexican imports also triggered a broader market sell-off, with crypto markets absorbing much of the blow.

While Bitcoin dominance continues to rise, altcoins struggled to gain traction. Historically, altcoin season begins when capital rotates out of Bitcoin and into alternative cryptocurrencies, pushing their prices higher relative to BTC. However, the current market structure suggests that capital remains risk-averse.

Investors appear to be positioning defensively, opting for the relative safety of Bitcoin while waiting for a clearer signal to rotate into altcoins.

Capital Remains Benign to Bitcoin as ETH/BTC Extends Multi-Month Downtrend

Bitcoin dominance sits at 62.3% and continues to climb.

The metric, which showcases the proportion of total market capitalization captured by Bitcoin, highlights that investors are allocating capital toward Bitcoin rather than alternative tokens.

Since early February 2025, Bitcoin dominance has maintained a clear uptrend, with consistently higher lows and strong volume support. This trend shows no signs of slowing, further reinforcing that capital rotation into altcoins has yet to begin.

Relative weakness in Ethereum (ETH) price adds another layer to this outlook. The ETH/BTC pair has extended its multi-month downtrend, recently trading near 0.022 BTC.

Usually, the first altcoin to rally in a new cycle, Ethereum failed to hold any upside momentum against Bitcoin. It continues to form lower highs and lower lows, implying a lack of market confidence in ETH’s leadership.

From the chart, Ethereum remains unlikely to ignite broader altcoin momentum without a breakout above the trendline resistance.

Completing the broader outlook, Total market capitalization excluding Bitcoin (TOTAL2) weakened sharply since topping near $1.6 trillion in December. It now trades closer to $1 trillion, showing a prolonged consolidation with fast-decreasing volume.

The same behavior appears in TOTAL3, which excludes both Bitcoin and Ethereum. Market capitalization has dropped to roughly $780 billion, nearly erasing its Q4 2024 gains. The decline suggests limited investor appetite for smaller-cap tokens.

There is no technical evidence yet that altcoins are preparing for a rally. The price structures remain corrective, volume trends are weak, and capital flows favor Bitcoin as dominance increases.

Unless Bitcoin dominance reverses and ETH/BTC regains strength, the market remains firmly in Bitcoin’s control. In the short term, this signals that altcoin season appears to be postponed.

Recent On-Chain Activity Has Nothing For Bulls Waiting For Altcoin Season

Recent on-chain metrics highlight a market still operating under cautious conditions.

Tracking USDT net transfer volume across all exchanges showcases a consistent pattern of outflows throughout March. Several days recorded red bars exceeding $250 million, with the most aggressive outflows nearing $1 billion in a single day.

These sustained removals of Tether from exchanges suggest that investors have been exiting risk positions or transferring capital to private wallets. Rather than signaling imminent market entry, these movements point to a reduction in active trading.

Although a brief inflow spike emerged at the end of March, it remains isolated and does not offset the broader outflow trend.

During altcoin-led bull phases, USDT floods exchanges as investors prepare to buy higher-risk assets. The absence of sustained inflows further weakens the case for an upcoming altcoin season.

Highlighting a similar sentiment shift, USDC data from CryptoQuant reveals a striking decline in exchange reserves.

As of April 1, Standard Chart shows a steep decrease in USDC reserves held on exchanges. Since mid-March alone, these reserves have fallen to nearly $5.2 billion.

This substantial reduction may indicate significant redemptions or large-scale capital deployment by institutions. However, the broader context suggests a continued wait-and-see approach, as it is not accompanied by corresponding inflows into altcoins or a surge in altcoin trading volume.

Together, these metrics show no strong capital rotation forming in favor of altcoins. While some capital may be moving off exchanges for strategic reallocation, the overall signal from stablecoin activity is defensive.

Until these flows reverse and align with technical breakouts, the short-term outlook suggests that altcoin season is still unlikely.