Whales are quietly building a position while retail investors are still on the sidelines: Are alts about to explode?

Author: Ben Fairbank Compilation: Vernacular Blockchain

A friend recently described the current cryptocurrency market as a “broken record”—Bitcoin and Ethereum are consolidating, and the time for altcoins to hit resistance levels feels endless, with many coins hitting far more times than the usual 3 before confirming or failing. If you are a newcomer, this silence can be deafening. After all the headlines about ETFs, institutional inflows, and halving cycles, why is the altcoin bull market still delayed?

Veterans who have experienced previous cycles understand that these boring periods are the times for wealth allocation, not for cashing out. For newcomers, the long wait feels eternal, while for veterans, it remains a phase of fear and panic, as they know the time to complete their final position allocation is running out.

In 2017 and 2021, we witnessed a surge of funds flowing into Bitcoin, then towards Ethereum, and within weeks, igniting altcoins. This time, the entire process is slower, and the roster of participants is much larger. Understanding why the market is stagnant and why this is a feature rather than a flaw could determine whether you are accumulating chips in the biggest bull market of your lifetime or handing them over to the whales. Your actions now will determine the final outcome.

01 The four-year cycle rhythm: Why is it delayed this time?

The cryptocurrency bull market follows a highly reliable rotation pattern. Historically, it is divided into four stages: Bitcoin leads, Ethereum starts to outperform, funds rotate to large-cap altcoins, and finally, the frenzied “altcoin season” pushes small-cap coins into parabolic trends. These stages typically complete within 18 months after Bitcoin halving. I always believe that history is the best teacher, patterns are patterns, until they are no longer patterns.

In 2017 and 2021, the points at which Bitcoin and most large-cap coins reached new highs were about 2-3 months earlier than now. According to Glassnode's cycle comparison, Bitcoin should have peaked by now, but it has not.

I have repeatedly stated that the longer the time taken this time, the higher the increase, but am I right? The only certainty in life is that no one knows the answer. However, I see this as the sinking of the Titanic, and the Titanic represents today's traditional currency system. Bitcoin and altcoins are the lifeboats, and more people are seeking to board than ever before. The difference is that retail investors are predominantly male, the group least likely to gain access to safe passage. This analogy may be rough, but I believe it is apt—the beauty of theory lies in the fact that only time can prove right or wrong, and history tells us this is the pattern.

The cycle extension theorists point out that each bull market lasts longer than the previous one, approximately 24, 28, and 33 months, and the current cycle may extend to 37 months, with the next major peak possibly in December 2025.

Three indicators to watch are: BTC dominance falling below 60%, ETH/BTC ratio reaching 0.058, and the Federal Reserve cutting interest rates. If we consider the interest rate cut on September 17 (current probability 87%), it could theoretically start around September 10. Assuming the last three altcoin seasons lasted 8, 10, and 14 weeks respectively, then 14 weeks would extend to December 24 (if starting on September 10). I predict this date because of the risk of picking a top; setting target exit prices and dates is very important, so I set December 24 for myself, regardless of whether I'm right or wrong.

Those who are used to the adrenaline of 2017 or 2021 may find this lag frustrating, but it’s also a reason why the next round of the market could be spectacular. We are at the best balance between complacency and optimism, with the rubber band stretched but not yet broken.

02 Signals in the Altcoin Market

The total market capitalization of all altcoins, excluding Bitcoin and Ethereum (TOTAL 3), has been in a four-year compression since 2021. The chart shows a continually rising bottom, indicating sustained buying pressure that repeatedly rejects breaks above the resistance. Each hit weakens the ceiling, and when the breakout occurs, the movement is often violent. Some coins have hit 8 times, which usually suggests that “whales are quietly boarding the lifeboat.”

On-chain data also corroborates this tense atmosphere:

70% of the top 50 altcoins are currently outperforming Bitcoin on a monthly basis, which is a strong signal of capital rotation. The numbers don't lie.

Bitcoin's dominance rate has fallen below a key support level for the first time since the end of 2024, historically marking the starting gun for altcoin season.

Analysts are monitoring the “OTHERS” chart (market capitalization of all coins outside the top ten) and have found that it replicates the sharp recovery pattern seen after the drop in 2024. If Bitcoin and the S&P 500 break out together, the altcoin sector could surge to $570 billion.

But the breakthrough has not yet arrived. Why? Macroeconomic headwinds have suppressed risk appetite, and liquidity is scarce. This is indeed true for retail investors, but we see companies like MicroStrategy converting their treasury into Bitcoin, with some converted into Ethereum. This is a true major reversal, and it’s unclear how many more signals people need.

03 Why are macro factors suppressing the market?

Cryptocurrency is no longer an isolated asset. Binance Research shows that the correlation between Bitcoin and traditional bonds has been strengthening since 2020. During the interest rate hike cycle in 2022, both Bitcoin and bond prices fell, indicating that cryptocurrency now behaves like a high beta risk asset and is sensitive to liquidity conditions. This is why I say this is the last round of a major bull market. Imagine if this bull market happens as I say, it will make everyone unable to ignore the crypto market, and it will become part of the mainstream.

In the first and second quarters of 2025, the bond market experienced a storm: the yield on the 10-year U.S. Treasury jumped from 3.8% to nearly 4.6%, and the MOVE index (bond market volatility) soared to 139, while the high-yield credit spread widened by 202 basis points. Macroeconomic drivers include tariff uncertainty, stubborn inflation, and record government debt issuance. Binance analysts warn that ongoing macro uncertainty means range-bound volatility, and a soft landing scenario could trigger a rebound. Essentially, we are waiting for the launch signal.

These headwinds have forced even cryptocurrency enthusiasts to pay attention to the Federal Reserve's schedule. Bitcoin has been stuck in the range of $102,000 to $115,000 for months; as long as it holds above $100,000, the bullish structure remains intact. This is why the Fed's rate cuts may become a key turning point—liquidity injection could be the catalyst for triggering the next wave. I believe that this round of the ETH/BTC ratio does not necessarily have to reach 0.058, as coins like SOL have gained more market share. The market is evolving, and our understanding must keep pace.

04 Why does this cycle feel different?

Start later, but the stage is bigger

Glassnode data shows that we are a few months behind the previous cycle. Veteran trader Peter Brandt believes there is a 30% chance that Bitcoin has reached its peak, while analyst Colin Talks Crypto believes the cycle is extending, pointing to a 37-month timeline. The divergence itself reflects the addition of new variables: macro policies, ETFs, corporate funding, etc.

Selective Altcoin Season

Miles Deutscher's AI-driven “Altcoin Surge Rating” found that early cycle altcoins soared by thousands of percentage points, but this time most underperformed Bitcoin. He attributes this to tightening monetary policy, institutional preference for BTC, Ethereum's difficulty in outperforming BTC, and declining retail interest. His model waits for four signals to align: a decrease in BTC dominance, an ETH/BTC breakout, an increase in altcoin index, and improvement in retail sentiment. When aligned, he expects a shorter and more selective rebound, focusing on real application sectors. That said, MeMe coin still dominates, and applications are a lagging indicator.

Market-wide compression

TOTAL 3 charts show altcoins consolidating for four years, with the altcoin dominance reaching a new cycle high on August 14 but not a historical high, subsequently falling below $1.6 trillion. Technical analysis suggests that the correction may end around $1.35-1.43 trillion, with small-cap coins potentially facing pressure before a breakout in the fourth quarter.

Evolution of Investor Behavior

The previous altcoin season was driven by retail FOMO and Dogecoin clones, but today it may be driven by more rational catalysts: tokenization of real-world assets, institutional ETH staking, and regulatory ETFs. Unlike the frenzy of 2021, the new coin supply and regulatory scrutiny suggest that the rebound may be sector-specific rather than universal.

My personal opinion is: the crypto market is like a dish, initially made with only three simple ingredients. With each bull market, new ingredients are added, making the flavor complex and bringing unexpected changes. As an early participant, I look forward to people truly building products and companies that realize the integration with value. At that moment, the “magic” of the crypto market may disappear. Once you enter this field, it's hard to leave, but I am gradually getting tired of the current state and measurement methods. I look forward to continuing to build with technology, rather than reacting to token prices and retail investors, who rarely align with company goals.

05 Why does it feel so slow?

Because this is the buildup before the spring. Altcoin seasons rarely start during the price discovery phase of Bitcoin, usually occurring after Bitcoin has risen over 200% and then enters a consolidation phase, with funds starting to rotate. Yieldfund points out that altcoin seasons typically commence when major altcoins like Ethereum and Solana start to outperform and Bitcoin's dominance drops below 54%.

This rotation is quietly happening: 70% of top altcoins have outperformed BTC, with Ethereum's new ETF and staking yields attracting institutional inflows, while Bitcoin's dominance rate declines. However, macro pressures have trapped prices in a narrowing range. The feeling of slowness is because the fuse is still burning. When liquidity finally returns—whether through Federal Reserve rate cuts, a breakthrough in the S&P 500, or clear regulations on crypto ETFs—the compressed energy of the TOTAL 3 and OTHERS indices may be released in weeks rather than months.

We have all seen this situation. I wait for a flood of messages saying, “I was about to buy, and suddenly it went up. Is it too late now? What should I buy?” The bull market always catches people off guard, and the current calm will surprise many.

06 Key Observations When the Fuse Is Burning

Bitcoin Support and Dominance: As long as BTC holds above 100,000 and the dominance continues to decline, the rotation script is still in play. A breakout with a 60% share often marks the beginning of altcoin season.

Ethereum/BTC Ratio: A breakout in ETH/BTC will mark the second phase of the rotation. Ethereum is currently strengthening due to ETF inflows and institutional adoption. Previously, it needed to reach 0.058, now it's only 0.039 (I think this round is not that important).

Macro catalysts: The Federal Reserve's September meeting, bond market fluctuations, and tariffs will determine the timing of liquidity return. Uncertainty means volatility, while clear signals trigger risk appetite.

Altcoin Indicators: Pay attention to altcoin momentum scoring signals (Bitcoin dominance, ETH/BTC, Altcoin Index, retail sentiment) and the mid-cap coin momentum signs in the OTHERS charts.

07 Summary

The current calm is not a sign of market weakness, but rather a signal of compression. Four years of altcoin consolidation, delayed cycle peaks, and macro headwinds have nurtured immense potential energy. The rotation script for Bitcoin, Ethereum, and altcoins is slowly unfolding. The difference this time is the scale of participation: regulatory ETFs, corporate treasuries, real-world assets, and tens of millions more users. When the rubber band snaps, it could be the explosive rotation I hinted at, rewarding those who have patiently endured the dull period.

Don't give away chips out of impatience. The market is quiet because the band is warming up. When the music starts, you need to have your seat, but don't forget to leave before the music stops. Greed is deadly, and fear will forever deny you a chance to enter. Time is running out.