As Bitcoin’s market share dips, experts warn that altcoins are unlikely to see a breakout just yet.

Bitcoin’s Pullback Reflects Deleveraging, Not an Altcoin Surge

Bitcoin (BTC $84,392.84) has seen a sharp decline this month, accompanied by a drop in its market dominance—the proportion of BTC’s market cap relative to the total crypto market. While falling dominance is often interpreted as investors rotating into altcoins, analysts say the current trend reflects a broader market reset rather than a straightforward BTC-to-altcoin shift.

Price action, cross-pair performance, and on-chain metrics all point to a steady deleveraging process, rather than the early stages of an altcoin season. BTC has fallen nearly 16% over the past month, with its dominance slipping from 61.4% to 58.9%, according to CoinDesk data. Meanwhile, major tokens like Ethereum (ETH $2,741.79), Cardano (ADA $0.3976), Dogecoin (DOGE $0.1384), and Solana (SOL $126.63) have seen deeper losses.

Some pairs, however, show selective resilience. XRP/BTC has strengthened meaningfully, and ETH/BTC has declined only slightly, indicating stability in certain areas rather than a broad market rotation. Analysts attribute this to the market digesting excess leverage following October’s liquidation events, rather than a surge into risk-on altcoins.

“Bitcoin’s decline this month reflects ongoing deleveraging that began with October’s liquidations,” said Rohit Apte, Head of Markets at Hex Trust. “The market is grinding lower as leverage is flushed out, and we are not yet in an altcoin season.”

On-chain data supports this view. Ethereum’s ecosystem remains active but stable, with Base processing roughly 19 million daily transactions and seeing a surge in token creation via Coinbase’s Launchpad and Smart Wallet tools. Other major networks—including Optimism, Arbitrum, Polygon, and Celo—maintain high throughput without spikes in fees.

This suggests that the market is neither overheating nor entering the speculative frenzy typical of altcoin seasons. Traders are reducing exposure cautiously rather than chasing higher-beta assets. Until BTC and ETH stabilize and consolidate, the market is likely to drift sideways, keeping a true altcoin season on hold.