The 2025 cycle has introduced some notable market divergences.
Historically, Bitcoin [BTC] has seen strong rallies after each halving, with the first four post-halving cycles driven by supply scarcity and demand imbalance. However, 2025 broke that trend, with BTC closing the year down 6%.
A similar divergence is showing up in altcoins. TOTAL3 (market cap ex- BTC and ETH) has printed its fourth straight red year versus Bitcoin, effectively capping an “altcoin season” that’s been fading for four years.
That divergence naturally points towards BTC’s growing market influence.
Technically, this isn’t a stretch. Bitcoin dominance (BTC.D) has put in four consecutive uptrends, climbing from roughly 40% in 2022 to above 60% in 2025. That’s a solid 100% gain in market cap, roughly $900 billion added.
Notably, over the same period, total market cap grew to $1.11 trillion, meaning nearly 80% of that new capital landed in BTC, highlighting its growing influence. In this context, is an altseason really a thing of the past?
The 2021 rally in retrospect – Key altcoin market signals
Looking back, the 2021 cycle was a textbook altcoin season.
On the 12-month chart, BTC’s market cap closed the year up 64%, breaking through the historic $1 trillion-milestone. And yet, TOTAL3 (market cap ex-BTC and ETH) completely outpaced it, rallying a staggering 541%.
The result? The Altcoin Season Index peaked, signaling a full-blown altseason, with capital clearly rotating into the broader alt market. Since then, however, BTC has taken control. The question is – What really changed?
The answer is simple – Altcoin funding rates have spiked.
Simply out, leveraged longs are overcrowded, and while that might sound bullish, it’s actually trapped altcoins in a volatile loop. Even a small sideways move can trigger a cascade of liquidations.
Add rising BTC.D, and alts have become highly vulnerable to sharp swings. In this context, the growing divergence between Bitcoin and alts isn’t a fluke. Instead, it shows why 2021 was probably the last real “altcoin season.”
Final Thoughts
- Altcoin funding rates have spiked, creating overcrowded longs that trap altcoins in a volatile loop.
- Rising Bitcoin dominance has funneled capital towards BTC, making alts vulnerable and explaining why 2021 was likely the last true “altcoin season.”
