A Crypto Bull Run Guide

Bitcoin Halving, All-Time High and Altcoin Season: A Recipe for a Bull Run, Right? First, Bitcoin halving reduces its issuance rate, causing a supply shortage. After that, BTC rallies to its ATHs and is followed by a horde of pumped altcoins, led by investors who prefer higher, albeit riskier, returns. The altcoin season is then in full swing. Bitcoin saw its last halving in May of this year, and shortly after, it crossed the $100,000 mark, a historic milestone. Yet the altcoin market is bleeding. Where does the usual gathering take place? Is the golden recipe broken? The rise of institutional capital and the liquidity crunch due to high interest rates, coupled with Trump’s positive but bold approach to crypto, have ensured one thing: this cycle will be unlike any other we’ve seen previously.

How is this cycle different?

Each cycle has four stages: accumulation, markup, distribution and markdown. Although the mechanism behind these steps is well known, market timing is one of the most sought-after skills. You are trying to predict when we enter a given stage to strategize your trades. However, even though cycles follow a predictable pattern, we must not forget the broader context of the market – and crypto has been through a lot over the past year.

Institutional capital

The growing presence of institutional investors in the Bitcoin market has reshaped its dynamics. Having taken 7th place as the world’s largest asset, Bitcoin has become a new asset of choice for institutions, supported by the emergence and growth of crypto ETFs. Their increased participation often brings greater price stability. Still, for altcoins, this may not be good news. After all, large fluctuations and corrections redirect capital flows towards altcoins. Less volatility means less returns that could return to the altcoin market.

This year has been special. The launch of Bitcoin spot ETFs has led to a significant influx of capital from traditional finance into the crypto market. Institutional inflows into these ETFs triggered a Bitcoin supply shock, further strengthening its dominance. ETF-driven demand for Bitcoin directly influences Bitcoin dominance, which currently sits at around 56%, a significant metric often overlooked by novice traders. It measures the market share of BTC compared to altcoins, allowing us to know whether we are in a Bitcoin season (BTC outperformance) or an altcoin season (altcoins outperformance). What does strong BTC dominance mean with a stable Bitcoin price? Altcoin dumping. And in this cycle, Bitcoin spot ETFs have extended Bitcoin’s dominance. This new variable was absent from previous bull runs and will make the 2025 altcoin season undeniably unique.

Macros: liquidity and regulation

If you ask a finance manager about the most important financial metric, they will tell you it is liquidity. In 2023 and 2024, US interest rates will reach one of the highest levels in a long time. Even though it has fallen from 5.25% a year ago to 4.19% today, it remains a relatively attractive return for a risk-free asset. On the other hand, lower interest rates often fuel cryptocurrency bull runs for a very simple reason: they create a favorable environment for riskier assets to thrive. After all, risk-free public debt with a yield of 0.11%, as in 2021, is as attractive as losing its capital due to inflation. Low rates mean cheaper borrowing and increased liquidity, which in turn pushes investors to park their money for higher returns. Or? Yes, you guessed it. Crypto.

The Trump administration’s victory in the United States has undoubtedly shaken the crypto world. The Bitcoin law has sparked heated debate in crypto and non-crypto circles. If passed, the Senate legislation would require the Treasury and the Federal Reserve to purchase 200,000 bitcoins per year over a five-year period to accumulate one million bitcoins. In other words, about 5% of the world’s supply. It goes without saying that the pro-crypto regulations are a very significant step for the widespread adoption of crypto assets, and Trump’s stance proved to have sparked positive sentiment, with BTC hitting its ATH shortly after the future president has confirmed his intention to create a Federal Reserve BTC.

As BTC maintains its dominance, high interest rates, and pro-crypto regulations in the United States, should we expect a true altcoin supercycle in 2025? It’s a billion dollar question.

“Wen altszn”

If history has taught us anything, it’s that altcoin pumps often follow major moves in Bitcoin. Still, it’s impossible to estimate the magnitude of these price movements – or exactly how long after new altcoins hit Bitcoin’s all-time high. David Siemer, CEO of Wave Digital Assetssays: “I don’t think we will see an altcoin season as dramatic as 2021 in the near future, which means BTC dominance will fall below 40%. But we will see a huge increase in altcoin values ​​as BTC continues to rise. Siemer then adds that “for altcoins to break out like 2021 over BTC, the usage (adoption) and value (revenue capture) of altcoins must increase by several orders of magnitude,” emphasizing that this could happen in at least 3 years old. But once it begins, the altcoin season itself can be easily recognized due to some rather bullish signals:

• Rapid price growth with altcoins outperforming Bitcoin, especially large-cap altcoins. Multiple stories are driving this growth, not limited to single trends.
• Altcoin dominance is skyrocketing as in the May 2021 altcoin season. These coins have been gaining traction in the market, with the combined market capitalization of the top 100 altcoins reaching 1.3 times that of Bitcoin.
• FOMO-induced sentiment, high trading volumes, and risk-on investors are fueling buying pressure, as well as price momentum.

Cane Island Digital Research shared in its “Altseason Proof” findings on the seasonality of altcoin rallies, showing ETH as a proxy for the altcoin to experience a bull market. Additionally, it mentions a repeating pattern of the alternating period from January to May.

Narrative outperformance

Although the upcoming altcoin season may differ significantly from what we are used to, some sectors have secured their place in the crypto space. After the $VIRTUAL token saw an increase of 24,908.4% (or 249x), it’s safe to say that we have entered a new level of narrative domination. While memecoins could overtake sectors like real-world assets or AI, AI agents are in a category of their own, often seen as the driving force of the next supercycle.

Artificial intelligence is still at the top of its game, and with the advancement of AI agents, the on-chain AI economy has gathered much of the mind, peaking at 50% in 2024, according to Kaito AI. This trend will likely continue into 2025, driven by unprecedented demand for AI services.

Institutional adoption, sparked by big names like BlackRock, has also impacted sectors like real-world assets, legitimizing tokenization as a fundamental component of the crypto world. While the main focus is on AI and AI agents, traditional finance is exploring tokenization as a viable business option, with major banks like JP Morgan and Goldman Sachs trying to disrupt the financial market.

How to Prepare for Altcoin Season?

As we enter 2025, there are several things we need to keep in mind ahead of the altcoin season. First, Bitcoin dominance is your friend, so use it wisely to plan your trades. Websites like BlockchainCenter.net can help you assess whether we are in an altcoin or Bitcoin season. What is important to keep in mind is:

• Crypto is largely sentiment-driven, so look for regulatory developments, macroeconomic trends, or crypto-native narratives (DeFi, AI agents, memecoins).
• Not all altcoins will follow BTC price dynamics. Historically, projects with strong fundamentals or those aligned with emerging narratives, such as AI projects, perform better. But prioritize quality over quantity and focus on projects with strong fundamentals, active teams and, ideally, product-market fit that excites a broad community.
• Correctional services are healthy. They signal consolidation and allow investors to take positions before the next bullish leg. Altcoin seasons often occur in the later stages of a bull run. Be patient.

Altcoin Season 2025

The crypto market is maturing. Each cycle is a stepping stone and should be seen as a learning lesson. As memecoins continue to reap their rewards, new narratives are becoming increasingly influential. But here’s the interesting part: currently popular stories, like AI agents, aren’t just passing trends. To top it all off, we are now facing a greater impact from macroeconomics and institutional adoption than in any previous surge. Does this mean we should expect different dynamics from altcoins this time around? To a certain extent. Nor should we blindly follow the pattern of previous years. The question is not if the altcoin season will happen, but rather when and to what extent it will be different from previous years. Fasten your seat belt.