Experts warn September’s rally is mixed with inflated low-float tokens and scams, urging caution despite strong breakout potential
The Altcoin Season Index has surged to 71, raising optimism among analysts that the crypto market may be transitioning from an Ethereum (ETH ) season into a full-fledged altcoin season.
Beyond the index, market watchers are also pointing to additional signals that suggest a broader altcoin rally may be on the horizon.
According to Blockchain Center data, the Altcoin Season Index has climbed sharply from 59 yesterday to 71 at press time. Typically, a reading above 75 indicates the start of an altseason, where 75% of the top 50 altcoins outperform Bitcoin over a 90-day period.
While the index has not yet crossed that threshold, its rapid climb has already caught traders’ attention.
“Altcoin season is in full force, and it finally looks like the shift from ETH to all the other coins is about to happen,” an analyst posted.
Moreover, Merlijn The Trader, also highlighted another major sign. In an X (formerly Twitter) post, he pointed out that Bitcoin Dominance (BTC.D), which tracks Bitcoin’s share of the total crypto market cap, slipped below a key support level. Merlijn emphasized that this drop is happening quickly, rather than gradually.
“Every cycle, this marks the same outcome: Bitcoin cools. Alts ignite. Rotation isn’t coming. It’s already here. This is how altseasons always begin,” he added.
From a technical perspective, another analyst drew parallels to historical patterns. He outlined that in 2017, altcoins staged a breakout after considerable time in consolidation, sparking one of the most dramatic rallies in crypto’s history.
He further noted that the current setup strongly resembles that period. The structure shows familiar signs: a descending wedge, a confirmed breakout, and an ongoing accumulation phase where investors gradually position themselves. According to his analysis, these factors together suggest that the conditions for another significant altcoin surge may already be in place.
Meanwhile, prominent investor Lark Davis highlighted the recent breakout in altcoins, noting that they are coming out of a triangle formation to the upside.
“Consolidation since mid-August now looks ready to resolve higher. RSI isn’t overheated, and timing lines up perfectly with a BTC → ETH → alts rotation,” Davis commented.
Thus, all these signals point to a capital rotation to altcoins in September. But what happens next? Well, according to Altcoin Vector, the market phase has shifted from Ethereum to lower-cap altcoins, a move that, based on past patterns, signals fading interest in the broader altcoin sector. This shift has often preceded a reset back into Bitcoin.
“But this isn’t the full picture. The phase could return to ETH once its accumulation process completes — compression is building, and ETH may be setting up for the next leg,” Altcoin Vector claimed.
Amid the altcoin season frenzy, analysts note that September’s rally comes with distinct dynamics. Simon Dedic, Founder of Moonrock Capital, warned that alongside legitimate rallies, speculative tokens with inflated valuations and questionable volume are also pumping.
“We’re entering altseason, but scams will pump the hardest. Tokens like MYX or IP are clearly just well-executed low-float/high-FDV extraction plays. And then there are coins like M or TDCCP that I hadn’t even heard of before, yet trading at ridiculous valuations with a lot of volume, which is clearly fake,” he remarked.
Dedic added that the months ahead could be highly profitable, but equally riddled with schemes, making caution crucial.
Notably, Market veterans also stress that the environment in 2025 is not the same as in past cycles. Gareth Soloway observed that today’s ‘altcoin bull market’ has shifted from altcoins to small-cap stocks.
“The recipe for a 1000%+ daily gain is to buy an altcoin & claim it will be a reserve currency or the use case leader. First it was BMNR, yesterday OCTO, today CWD. Insanity,” Soloway said.
Therefore, the surge in the Altcoin Season Index, falling Bitcoin dominance, and technical setups hint that an altcoin rally may be underway. But with speculation and scams also rising, this unique cycle demands both optimism and caution.
