Altseason odds – What next after latest round of crypto liquidations?

Key Takeaways

Altcoin Open Curiosity hit $61.7 billion because the Altcoin Season Index hit 61 – Its first take a look at since early 2025. And but, fading rotational flows raised doubts about whether or not this breakout alerts a long-lasting altseason or not. 

In lower than 72 hours, the crypto market shed almost $20 billion, with Bitcoin [BTC] alone dropping roughly $10 billion and exhibiting that this cycle remains to be very a lot “BTC-led.”

Backing this, Bitcoin dominance [BTC.D] slipped to multi-month lows at 57%, whereas TOTAL2 (ex-BTC cap) fell in tandem. All in all,  rotational flows remained flat, reinforcing a risk-off market.

Altcoin OI surges regardless of muted flows

In opposition to that backdrop, Altcoin Futures Open Curiosity (OI) blew up +$9.2 billion on Friday, 22 August, taking the whole alt OI (pink line) to a contemporary all-time excessive of $61.7 billion. This pointed to rising leverage in alts, regardless of short-term chop.

Supply: Glassnode

Sometimes, spikes in OI have a tendency to trace Bitcoin’s worth motion.

Nevertheless, high altcoin OI (beige bars) has steadily climbed from $20 billion in March to $60 billion by late August, including almost $40 billion, outperforming BTC’s $30 billion OI growth over the identical interval.

Put merely, the altcoin market is likely to be overheated. Merchants is likely to be front-running an altseason, however with rotational flows muted, may this feed a volatility loop as an alternative?

Altcoin index breaks out, however historical past urges warning

Excessive leverage throughout alts amplified the pullback. 

Supporting this, high altcoin Ethereum [ETH] noticed a virtually 4% drop in OI over the previous 24 hours, aligning with its 3% worth decline. All whereas Bitcoin contained its drop to 2.68%.

Having stated that, high altcoins have endured deeper hits, initially triggered by BTC’s correction, however magnified as leverage obtained flushed out.

This dragged the Altcoin Season Index right down to 56 from 61 only a day prior.

Supply: Blockchaincenter

Historical past provides a warning

An identical setup again in late Jan-early Feb capped the altseason. 

The index hit 61, however BTC’s 18% month-to-month drop pushed it down to twenty by the top of Q1. Ethereum fell even tougher, hitting a month-to-month low of $1,440 and different altcoins adopted go well with.

For now, the market is exhibiting indicators of stress: Altcoins stay susceptible, leverage is getting flushed, and any rebound could also be short-lived except rotational flows choose up, capping the altseason once more.