Hotcoin Research | Bitcoin Surges Past $100K — Is the Altcoin Season Finally Here?

I. Introduction

As Bitcoin climbs back above the US$100,000 mark and Ethereum stages a strong rebound, on-chain activity and trading volume across major networks have surged — signaling a fresh wave of capital inflow and a renewed appetite for risk. With supportive macro conditions and strong internal momentum driving the market, crypto is once again poised for a high-energy build-up.

In this context, the key question is whether an “alt-season” is already underway. This report examines the current cycle from multiple perspectives — including the macro environment, market structure, on-chain indicators, the nature of the ongoing altcoin rally, and sector-level performance. We conclude with a forward-looking outlook on potential trajectories and risks to help readers better position themselves in today’s market — and stay ahead of tomorrow’s trends.

II. Macro Backdrop & Market-Structure Shifts

Easing Sino–US tariff tensions, abundant global liquidity, former President Trump’s persistent rate-cut rhetoric, and a steadily improving regulatory climate have combined to reshape the crypto landscape: Bitcoin dominance is declining, the Altseason Index is strengthening, and stablecoin supply is expanding — laying solid groundwork for the next phase of the altcoin cycle.

1. Macro Environment & Policy Backdrop

Global macro data have decisively shifted in favor of risk assets. U.S. headline inflation cooled to 2.3% year-over-year in April — the lowest level in four years — allowing the Federal Reserve to hold the federal funds rate at 4.25%–4.50% in May. Meanwhile, the U.S. and China agreed to a 90-day tariff truce: Washington cut duties on Chinese goods from 125%–145% to 10%–30%, and Beijing reciprocated by trimming its rates from 125% to 10%. This “ceasefire” helped ease recession fears and prompted major Wall Street institutions to lower their estimates of a hard landing. While President Trump has repeatedly pressured the Fed for faster easing, officials remain cautious; markets, however, are now pricing in two modest rate cuts in the second half of the year.

These developments have lifted global risk appetite, sending capital flowing back into equities and digital assets. As of May 15, total crypto market capitalization had climbed to US$3.5 trillion, reinforcing the structural bull case for crypto in 2025.

2. Structural Shifts Within Crypto

Bitcoin dominance has clearly peaked. Boosted by institutional inflows, BTC’s market share climbed to 64–65% in early May, marking the peak of the current “Bitcoin season.” But after Bitcoin surged past the US$100,000 mark on May 9, capital began rotating into the broader altcoin space. Within a single week, BTC dominance dropped by approximately 4.6 percentage points — the steepest weekly decline this year and a classic signal that altseason may be underway.

Source：https://www.tradingview.com/symbols/BTC.D/?timeframe=YTD

At the same time, the total market capitalization of altcoins (excluding BTC) rebounded sharply from a late-April low of around US$0.93 trillion to over US$1.45 trillion. This breakout from a descending wedge pattern, in place since late 2024, echoes the decline in BTC dominance and signals a clear shift toward broader portfolio diversification across the crypto market.

Source：https://www.coingecko.com/en/global-charts

3. Alt-Season Index & Liquidity Pulse

The Alt-Season Index offers a more intuitive read on market sentiment. After bottoming out at 14 on April 26, it has already climbed to 31. While still below the 75-point threshold that signals a “full-blown” alt-season, the rise points to a clear shift in investor behavior — from caution to calculated risk-taking — as market participants begin to overweight altcoins.

This sentiment shift is also visible on-chain. In early May, active wallet addresses and transaction counts rose sharply across multiple networks, while weekly DEX volume jumped 30% to US$8.4 billion.

Source：https://www.coinglass.com/pro/i/alt-coin-season

Liquidity is also surging. The total stablecoin supply reached a record US$245 billion in early May, with USDT alone surpassing US$150 billion — nearly double its 2021 bull market peak of around US$83 billion. As stablecoins act as a bridge between fiat and crypto, a rising float suggests significant capital sitting on the sidelines, ready to flow into BTC and, increasingly, altcoins. This represents a strong liquidity tailwind heading into the next phase of the market cycle.

III. Characteristics of the Current Alt-Coin Rally

Alt-seasons typically follow a major Bitcoin (BTC) rally, as capital rotates into mid- and small-cap tokens in search of higher returns. BTC’s breakout above the US$100,000 mark was the spark this time, mirroring the rotation pattern seen in past cycles. However, the current rally stands out in terms of duration, gain structure, and participant mix.

• Duration & Ignition Rhythm — Previous alt-seasons often lasted several months, usually unfolding while BTC consolidated or corrected. In contrast, this cycle is still in its early stages. As of mid-May, gains remain modest and localized, with the Alt-Season Index only just lifting off its recent lows, still well below the 75-point threshold that marks a “full-blown” alt-season. Retail FOMO is also largely absent, suggesting a slower, more sustained rally rather than a sharp, short-lived spike.
• Gain Structure & Rotation Order — This cycle has shown a more structured rotation. Large-cap tokens like ETH, SOL, and BNB led the charge with daily gains of 5–15%, followed by mid-caps such as MKR, CRV, and AAVE. In contrast, micro-caps and long-tail assets have lagged. This pattern suggests that capital is currently favoring projects with strong fundamentals, with more speculative moves likely to come later.
• Narrative Drivers & Capital Profile — Whereas 2017 was driven by ICOs and 2021 by DeFi, DOGE, and NFTs, the 2025 rally appears broader and more institutional. Themes such as AI integration, real-world asset (RWA) tokenization, and infrastructure plays are attracting both individual traders and institutional capital, from hedge funds to corporates.
• Investor Composition — Retail involvement remains lower than in past cycles, while institutions are supplying a greater share of the new capital. This shift is reflected in elevated derivatives activity, with professionals using futures and options to manage positions, resulting in more sophisticated, less volatile price action.
• Regulatory Climate & Market Structure — Unlike the “wild west” rallies of the past, today’s alt-season is unfolding within a maturing regulatory environment. U.S. spot ETF approvals, Hong Kong’s open stance, and rising sovereign interest have created tailwinds that allow institutions to participate more confidently. The result is a more orderly, value-oriented altcoin cycle — one that blends retail enthusiasm with institutional discipline.

IV. Sector Opportunities & Hot Narrative Trends

1. Meme Coins: The Party Goes On

Meme coins remain the liveliest corner of the crypto market. Platforms like Pump.fun have lowered the barrier to entry to zero — “anyone can mint” — triggering a speculative gold rush. Even during the market’s early-2025 lull, Binance Chain surged with activity, fueled by CZ’s endorsements, the Four.me launchpad, Binance Alpha listings, Binance Wallet’s TGE, and the Alpha Points program. As a result, BNB Chain became the second-most active meme network after Solana.

However, Pump.fun’s near-monopoly is now under threat. Competitors such as Raydium’s LaunchLab, spin-offs like Letsbonk.fun and Believe, and Eliza Labs’ Auto.fun are replicating the no-code minting model — some even layering in AI agent deployment. The meme coin supply is exploding, and so is volatility.

Legacy memes like DOGE and SHIB found new catalysts in 2025, while newer tokens — BONK, WIF, PEPE, MOODENG, POPCAT, FARTCOIN — have been rallying in waves. Even IP-driven plays like TRUMP surged around key events, such as the “Trump Dinner” on 22 May, proving that vibrant communities and cultural relevance can generate more than just hype.

On-chain data show rapid-fire, small-size trades — hot money cycling in and out. Meanwhile, social chatter on X (formerly Twitter) and Reddit is surging again, and KOLs are once more touting “today’s next 10x-er.” The speculative fever is building.

2. AI Tokens Stay in the Spotlight

The AI narrative, first ignited by ChatGPT in 2023, is back in force. After a sharp correction in 2024, the sector is resurging alongside renewed global AI enthusiasm and the broader crypto bull run. Since April, several AI tokens have significantly outpaced the market.

• Fetch.ai (FET) continues to expand its tech stack and partnerships, notably with Google Cloud. The token formed a rounded February base and completed a cup-and-handle breakout in mid-April, signaling sustained bullish conviction.
• VIRTUALS Protocol (VIRTUAL) and ai16z (AI16Z), which retraced ~90% during the winter slump, have posted violent rebounds since April, reigniting interest in the AI agent theme.

With AI adoption accelerating worldwide, narrative-driven tokens in this sector could benefit from both fundamental momentum and speculative attention heading into H2 2025.

3. Layer-2s Poised for Catch-Up

Ethereum’s Layer-2 race continues to be one of crypto’s most critical scaling battles. Arbitrum leads in users and dApps; Optimism is pushing forward with OP Stack; and Base is gaining ground through Coinbase’s reach. Yet, token performance has lagged behind network growth.

Since April, ARB and OP have posted only modest gains and still sit far below their post-airdrop highs — Arbitrum in particular remains down nearly 80%. Despite sluggish price action, sentiment among insiders remains bullish, as Layer-2s are widely seen as Ethereum’s most scalable path forward.

While high-performance L1s like Solana, BNB Chain, and Sui offer alternatives, L2s continue to hold the edge in Ethereum compatibility and security guarantees. If capital rotates from overheated micro-caps back into infrastructure plays, Layer-2 tokens are well-positioned for outperformance in the next leg.

4. RWA Tokens Win Institutional Favour

Real-World Assets (RWA) are shaping up to be the second major institutional narrative of this cycle. Rising rates have made traditional yields more attractive, and DeFi’s integration of RWAs offers a compelling win-win: on-chain users get yield, while off-chain institutions unlock new capital sources.

• MakerDAO and Ondo Finance are leading the charge. Maker’s Endgame strategy allocates reserve capital into U.S. Treasuries, generating yield for DAI holders and boosting MKR through profit-sharing.
• Ondo tokenizes U.S. bond funds, enabling on-chain investors to access familiar products via a few clicks.

Other notable players like Maple Finance (on-chain credit) and Centrifuge (asset securitization) further expand the ecosystem.

Retail adoption remains limited due to KYC and accredited investor requirements, so institutional capital drives most of the flows — and most of the price action — in this space.

V. Conclusions & Outlook

The market is clearly heating up, but we’re still in the early stages of the alt-season cycle. Bitcoin dominance is declining, altcoins are gaining traction, new narratives are emerging, and sentiment is shifting from caution to cautious optimism. All indicators suggest we are transitioning from a Bitcoin-led market to a broader altcoin-driven phase.

The macro environment will be the key swing factor. Most analysts expect the Federal Reserve to begin cutting rates in H2 2025. Once that easing materializes, global liquidity could expand sharply, triggering a second wave of risk-on flows.

This sets the stage for a “two-peak” bull cycle:

• One driven by expectation and positioning (now),
• Another driven by actual liquidity expansion (later).

In short, the party is unlikely to end soon. If capital continues rotating, narratives evolve, and liquidity conditions improve, the alt-season crescendo could stretch into late 2025 or even early 2026.

The feast is far from over.

About Us

Hotcoin Research is your trusted source for professional crypto insights and strategic analysis. Our three-pillar framework — trend analysis, value discovery, and real-time tracking — integrates deep research, multi-angle project evaluation, and continuous market monitoring.

Through our biweekly Hot Coin Selection Live Strategy Sessions and daily Blockchain Headlines, we deliver timely, actionable insights tailored to investors of all levels.

Backed by advanced analytics and a robust industry network, we equip newcomers with foundational knowledge and support institutional players in identifying high-potential opportunities. At Hotcoin Research, we help you stay ahead in the fast-evolving world of Web3, turning data into confident decisions.

Risk Disclaimer

The cryptocurrency market is highly volatile and subject to rapid changes. All investments carry risk. We strongly encourage investors to stay informed, assess market dynamics carefully, and implement sound risk management strategies to protect their assets.

Connect with Us

🌐 Website: https://lite.hotcoingex.cc/r/Hotcoinresearch

𝕏: x.com/HotcoinAcademy

📩 Email: labs@hotcoin.com