Bitcoin has seen a sharp decline this month, accompanied by a drop in its dominance rate, the share of BTC’s market capitalization in relation to the overall cryptocurrency market.
A lower dominance rate is often interpreted as investors rotating out of bitcoin and into altcoins, fueling speculation about the arrival of an “alt season”.
However, analysts caution that this decline does not necessarily signal a simple rotation. Rather, many see the market undergoing a reset, a broader readjustment rather than a straightforward shift from BTC to altcoins.
Price data, performance across pairs and activity on the chain all point to a steady deleveraging cycle rather than the opening stages of an altcoin season, according to analysts.
BTC has fallen nearly sixteen percent over the past month, according to CoinDesk market data, with its dominance falling to 58.9% from 61.4%. Tokens such as Ether , , and solana have recorded more profound losses.
XRP/BTC is one of the few pairs showing meaningful strength, while ETH/BTC is down only modestly, indicating selective resilience rather than a broad shift in leadership. The market is absorbing a leverage flush that began with the October liquidation rather than transitioning to a risk-on rotation.
“Bitcoin’s move this month reflects a general deleveraging that began with the October liquidation. Since then, the market has been grinding lower as leverage has washed out,” Rohit Apte, Head of Markets at Hex Trust, told CoinDesk in a Telegram interview.
Apte says we’re not quite in an altcoin season yet, as most altcoins have underperformed both bitcoin and ether on a relative basis.
“For any sustainable rotation at all, we would first have to see the majors stabilize and establish a price consolidation,” he continued.
On-chain metrics reinforce this picture.
Data from Blockscout provided to CoinDesk shows that Ethereum’s ecosystem is active but not overheating.
Base stands out as the current hotspot, processing around nineteen million transactions per day and seeing an increase in token creation fueled by Coinbase’s Launchpad and Smart Wallet tools, according to data curated by Blockscout. Other major networks, including Optimism, Arbitrum, Polygon and Celo, are stable and handle millions of daily transactions without an increase in fees.
This background suggests that the market is neither in distress nor heading into the kind of speculative fever that usually drives an altcoin cycle. A true altcoin season tends to coincide with rising fees, visible chain congestion, and a broad spike in activity across multiple networks at once.
Right now, traders appear to be reducing exposure without aggressively rotating into higher beta assets, a sign that caution remains the dominant sentiment.
Until BTC and ETH settle into a firmer range, the market appears to be sliding sideways rather than turning into the kind of momentum that drives a true all season.
