Coinbase stated that altcoins have recently seen significant growth, and the current state of the cryptocurrency market suggests that a shift towards cryptocurrencies other than Bitcoin may occur soon.
"We believe the current market conditions indicate that as we approach September, there may be a transition to a full-scale altcoin season," wrote David Duong, Coinbase's Head of Global Institutional Research, in Thursday's monthly outlook report.
This Coinbase analyst joins a growing number of traders and market observers predicting an upcoming altcoin season.
The company defines an altcoin season as when at least 75% of the top 50 altcoins by market capitalization outperform Bitcoin (BTC) over the past 90 days.
Duong added that there is "a significant amount of retail capital on the sidelines" in money market funds, and the Federal Reserve's easing policies could "release greater retail participation in the medium term."
The U.S. Consumer Price Index (CPI) for July, released this week, showed that inflation remained at 2.7% year-on-year, raising the probability of a Federal Reserve rate cut in September to 92% in the futures market.
A lower interest rate environment could attract new capital into the market and may act as a catalyst for high-risk assets like altcoins.
Another factor influencing the arrival of altcoin season is the decline in Bitcoin's dominance or its share of the total cryptocurrency market capitalization.
Duong noted that Bitcoin's market dominance has decreased from over 65% in May 2025 to about 59% in August 2025, "marking the early stages of capital rotation into altcoins."
According to TradingView data, Bitcoin's dominance currently stands at 59.5%, close to its lowest level since the end of January.
"Bitcoin's dominance has just formed its first monthly bearish crossover since January 2021," observed cryptocurrency day trader Ito Shimotsuma on Thursday. "At that time, altcoins only rose for four months when this happened," he said, adding, "A similar situation this time will lead to a rally that only goes up until December 2025."
Duong noted that the altcoin season index is also climbing but remains well below the historical threshold of 75 that defines an altcoin season, despite the market capitalization of altcoins rising over 50% since early July.
The altcoin season index from CoinMarketCap currently stands at 44, up from below 25 in July. The altcoin season index from Blockchain Center is neutral at 53, while CryptoRank's altcoin season index is at 50.
Duong stated that the current momentum is driven by narratives around digital asset treasury and stablecoins, and the divergence between the altcoin season index and total altcoin market capitalization "reflects growing institutional interest in Ethereum (ETH)," concluding:
Joanna Liang, founding partner of Singapore-based venture capital firm Jsquare, told Cointelegraph: "The formation of an altcoin season requires the combination of three key conditions: a supportive macro backdrop, a decline in BTC dominance, and a strong new narrative."
"Past cycles were driven by clear catalysts: ICOs in 2017-2018, Layer-1 in 2018-2019, and DeFi/NFT in 2021-2022," she said, adding:
Related: Investors target "entertainment-first" crypto gaming sector, with July funding surging 94%
Original article: “Coinbase predicts a full-scale altcoin season in September”
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