Altcoin Market Struggle to Recover as Bitcoin Stumbles, But Hope for Alt Season Remains

The recent drop in Bitcoin’s price to $112,044 on Sunday has sent ripples through the broader crypto market, raising fresh questions about the arrival of altcoin season. Despite a minor recovery to $114,000 at the time of writing, several top crypto tokens remain under pressure.

Solana dropped by 10% over the past week, while XRP and Dogecoin fell 5.5% and 9.5% respectively, according to data from CoinMarketCap. These declines are particularly notable given conditions such as a decrease in Bitcoin dominance (down 5.5% in the last month).

Ether’s 40% rally generally signals the beginning of altcoin rotation. But this time, the market has reacted differently.

Weak Altcoin Reaction Sparks Market Caution

Bitfinex analysts noted that while Bitcoin’s pullback should have, in theory, spurred a move into altcoins, speculative interest appears to be fading. 

“Interestingly, this break did not translate into a sustained altcoin bid — quite the opposite,” they said in a market report on Tuesday. This shift suggests investors are not rotating capital into smaller-cap coins, but rather de-risking altogether.

They added that the “OTHERS” index — which tracks cryptocurrencies outside the top 10 by market cap — dropped nearly 19% in the past 10 days before seeing a modest rebound. The data, they argue, supports the theory that speculative appetite is cooling across the board.

Mixed Signals as Analysts Watch for Next Move

While signs point to a broader consolidation phase, optimism still lingers among some market watchers. Bitfinex analysts noted that while the current trend leans toward caution, upcoming macroeconomic news or renewed ETF inflows could quickly shift market sentiment.

Some traders believe this pullback is a setup for a bigger move. Crypto analyst Ted wrote on X, “This is your best opportunity to stack utility alts before they go parabolic,” urging long-term investors not to lose sight of the bigger picture. 

Similarly, Merlijn The Trader highlighted that many altcoins are “coiling for a violent breakout,” drawing comparisons to historic chart patterns.

Meanwhile, CoinMarketCap’s Altcoin Season Index, which read 55 (indicating “Altcoin Season”) on July 21, had slipped back to 40 by Tuesday — officially signaling a return to “Bitcoin Season.”