Altcoins took a hit last week, but many signs showed that the trend wasn’t over. On August 20, the total crypto market cap for all altcoins (excluding Bitcoin and Ethereum) was still holding above $1.01 trillion.
That’s down from the peak but still higher than the key support zone that formed earlier in the year. At the same time, retail traders seemed to be returning, Bitcoin dominance kept dropping, and the Altcoin Season Index stayed flat at 51, right in the middle.
This isn’t full-on altcoin season yet, but it’s not Bitcoin season either. Let’s break down what the data said and why the next rally could still be altcoin-led.
$1T Mark Holds After Drop, Supporting Altcoin Season Narrative
The total altcoin market cap, which leaves out Bitcoin and Ethereum, saw a dip but stayed strong. It closed around $1.01 trillion on August 20.
The chart showed a big red candle two days before that, but the level didn’t break down; it simply touched support and bounced.
This support zone around $1 trillion has acted like a floor since April.
Every time the price dropped near this level, buyers stepped in. That means people weren’t panicking. They were likely waiting for the right entry.
The Altcoin Season Index sat at 51. This index tells us whether the market is favoring altcoins or Bitcoin.
A score below 25 signals Bitcoin season. Above 75 is altcoin season. At 51, the chart showed no strong trend yet, but historically, the index has moved fast once momentum picks up. Last time it went from 49 to 80 in just two weeks.
Also, Bitcoin dominance dropped to 59.18%, down from 65% early this year. This means that altcoins were starting to grab more crypto market share.
That shift usually happens early in a cycle, when Bitcoin cools down and traders rotate money into other coins.
Every past altcoin rally started with Bitcoin dominance falling. So this dip might just be the setup.
Crypto News: Retail Is Coming Back, Just Not All at Once
One of the charts showed that Google Trends interest in “altcoins” spiked on August 17. This was during the crypto market dip.
Usually, interest goes up after a big price jump, but here it rose during the pullback. That meant traders were watching the dip and searching for which altcoins to buy.
This is often how the first wave of retail activity builds up.
The stablecoin reserve on exchanges dropped to $52.3 billion, down from $54.5 billion. That’s a sign that traders weren’t rushing in with fresh money just yet.
But it also meant there was less dry powder sitting on the sidelines. When stablecoin reserves go too high, it often means traders are waiting.
When they drop, it can signal that they have already bought in or left. That’s a minor bearish sign.
On the risk side, ETH/BTC dropped 5.6%, moving from 0.0386 to 0.03648 BTC.
That told us Ethereum underperformed Bitcoin over the past week. But even then, Ethereum had touched its yearly highs just days earlier.
It means that the move might have just been a short-term rejection rather than a full breakdown.
Micro-Caps Are Running Again; Institutions See It Coming
The clearest bullish sign came from micro-cap altcoins. Coins like API3 surged 54%, WKC gained 52%, and others like LIGHT and TROLL showed double-digit gains.
These types of coins usually pump when traders feel ready to take bigger risks. And they move first, often weeks before the large-cap coins follow.
This isn’t random.
According to Coinbase and Pantera, the next wave of the bull run might be altcoin-led. In a note this week, Pantera called this the start of Phase 2, pointing out that in past cycles, altcoins dominated returns once Bitcoin cooled off.
One of the shared charts showed that in the previous altcoin season, they made up over 67% of total crypto market gains. That’s a huge piece of the pie.
So, while the dip looked scary on the surface, many key names and charts suggested that this might not be the end. It might just be the middle.
Altcoin prices dropped. But they didn’t break down. The total market cap is held above $1 trillion. Bitcoin dominance kept sliding. Retail was slowly creeping back in. And micro-caps started to pump hard.
Institutional analysts from Pantera and Coinbase said this was typical mid-cycle action. If they’re right, we’re not late to the altcoin season.
Source: https://www.thecoinrepublic.com/2025/08/20/crypto-news-broader-market-dip-doesnt-mean-altcoin-season-is-over-heres-why/