Altcoin Season: Can Leverage Spark Altseason Breakout Momentum?

Key Insights

• Altcoin season could be on the verge as massive leverage is getting stacked across a wide range.
• Altcoins/Bitcoin just hit a 4-month high and is now back above October 10th crash levels. At the same time, Bitcoin was down about 42%.
• BTC dominance was declining, but has the altcoin season officially started?

Bitcoin and altcoins are all doing badly at the moment. However, the altcoin season appears to have gained momentum in recent times. Participants have been fearful since the end of 2025, including during the short rally at the start of the year.

However, today’s data showed something very different. The leverage that has been stacking up on a couple of altcoins could define how these coins perform in the next few sessions. With leverage concentrated both above and below current prices, a break on either side could trigger a run.

Altcoin Season: Can leverage wipeout kickstart Altseason?

To begin with, Kingfisher data showed that altcoin leverage clusters were very dense. They ranged from -25% to +21% in comparison to spot prices of the altcoins. This widespread distribution indicated that altcoins were about to undergo significant changes.

The largest long cluster was at -2.08% from spot cryptos. These clusters were mostly made up of coins that ranked 101-200 and 201+ by market cap.

If prices of most altcoins go up and wipe out leverage above current levels, it would hurt short positions. That could start an altcoin season rally. These cascades of liquidations would push prices higher since forced buying makes gains bigger.

A downside breach below the spot prices could trigger more selling. It would also push the -2.08% long cluster into further liquidation.

This would exacerbate the situation, with the lower-ranked altcoins suffering the most damage. So, both directions could cause volatility. A big move hurts either way for buyers or sellers.

Altcoins/Bitcoin hits 4-month high and its impact on Altcoin Season Index

During this potential resurgence, the Altcoins/BTC ratio rose to 0.131058, the highest level in four months. This was higher than the levels seen during the crash on October 10, when the ratio fell below 0.110. When writing, Bitcoin had dropped about 42% from its most recent highs.

Thus, the chart showed that things had been getting better since the peak of 0.145 in November 2025. Green candles dominated the recent sessions.

This relative strength in altcoins showed they remained strong even as BTC declined. BTC is the main driver of crypto markets.

For the Altcoin Season Index over 90 days, the reading was still at 30, though it showed some growth. This rise could mean that the crypto market, especially altcoins, was gaining momentum.

The most recent index readings were a long way from the 75 mark that marks the start of altseason.

But if the Altcoins/Bitcoin ratio keeps going up, the altcoin season index could go up even more. This would lead to bigger altcoin rallies, but a BTC rebound could bring down the index.

Is Bitcoin dominance about to drop?

Adding more context, Bitcoin dominance was at 59.68%. This explained why there were only 30 altcoins in the top 100 that were outperforming BTC. This was after going slightly up 0.60% during the day. However, it was still in a 3-month candle that was consolidating.

This level was close to the key resistance level of 60%. Such was similar to what happened in previous cycles when dominance peaked before falling sharply.

Historically, BTC.D reached its lowest points below 40% during the altcoin bull runs of 2017 and 2021. After that, it quickly rose to 60%, ending the altcoin rally.

As of press time, there were only 47 days left in this quarterly candle. If it broke below 57.16%, altseason could start, as Bitcoin gives way to altcoins. But if it stays above 60%, it might slow down rallies, which would be good for BTC.

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