As expectations for interest rate cuts by the Federal Reserve (FED) in September rapidly rise, new trends in capital flow have emerged in the crypto market. Bitcoin (BTC)'s dominance has fallen below 60%, while the market capitalization of altcoins remains stable above $1.5 trillion, reigniting discussions about the "altcoin season." Although sentiment is still in a neutral zone, signals from both technical and capital perspectives suggest that the next round of altcoin market activity may be on the way.
The Federal Reserve (FED) interest rate cut expectations become a market catalyst
(Source: CME Fed Watch)
According to the CME Fed Watch tool data, the market expects a 97.6% probability that the Federal Reserve will cut interest rates by 25 basis points at the meeting on September 17. This expectation is influenced by the recent 0.9% increase in the U.S. Producer Price Index (PPI), partly due to the domestic prices driven up by tariffs imposed by the U.S. on major countries.
In the coming week, the non-farm employment and unemployment rate data will be released first, followed by the August PPI announcement on September 10. These data will directly impact the Federal Reserve's final decision. If interest rate cuts become a reality, it will lower the cost of capital and attract more capital inflows into risk assets such as cryptocurrencies.
Bitcoin's dominance declines, funds shift to alts
(Source: Trading View)
Bitcoin's dominance is an important indicator of the proportion of BTC in the overall cryptocurrency market capitalization. As of September 4, BTC dominance has fallen from the annual high of 65.91% on June 26 to 58.47%.
Meanwhile, the total market capitalization of cryptocurrencies excluding BTC (TOTAL 2) remains above 1.5 trillion USD and has formed a symmetrical triangle pattern on the daily chart. If it breaks through the 1.69 trillion USD peak set on August 14, the market will enter a price discovery phase, and alts are expected to usher in a full-scale explosion.
However, if it falls below the 1.5 trillion dollar support, the technical pattern and the possibility of an altcoin season will be challenged.
The altcoin season index indicates that the market has passed the halfway mark
The CoinMarketCap altcoin season index shows that currently, 53 alts have outperformed BTC in the past 30 days, while to reach the official definition of "altcoin season," there must be 75 coins that outperform BTC.
This means that although alts have shown relative strength, the market has not fully entered a phase of full outbreak. The Fear and Greed Index is currently at 44, indicating a neutral sentiment, volatility has returned, but it has not yet reached the FOMO (Fear of Missing Out) stage.
Interest rate cuts and capital rotation may become key triggers
Historical experience shows that when BTC's dominance decreases and market liquidity increases, funds often flow into high Beta altcoin assets. If the Federal Reserve (FED) lowers interest rates, combined with a warming market sentiment and technical breakthroughs, the altcoin season index is expected to quickly approach the critical value of 75, triggering a comprehensive market rally.
In the short term, investors should pay attention to the following three signals:
BTC's dominance continues to decline - funds are rapidly flowing into alts.
TOTAL 2 breaks 1.69 trillion USD — Technically entering the price discovery phase.
Market Sentiment Index breaks 50 — Investor risk appetite increases.
Conclusion
The Federal Reserve (FED)'s interest rate cut expectations have become the core catalyst driving the rotation of funds in the crypto market. As BTC's dominance falls below 60% and the market capitalization of alts remains high, technical and funding signals are paving the way for a potential altcoin season. If sentiment and the macro environment improve in tandem, the coming weeks may witness a comprehensive altcoin rally. Investors should closely monitor changes in market sentiment and key technical level breakthroughs to position themselves in potential targets in advance.
This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
The Federal Reserve (FED) interest rate cut expectations soar! Bitcoin dominance falls below 60%, altcoin season may fully ignite.
As expectations for interest rate cuts by the Federal Reserve (FED) in September rapidly rise, new trends in capital flow have emerged in the crypto market. Bitcoin (BTC)'s dominance has fallen below 60%, while the market capitalization of altcoins remains stable above $1.5 trillion, reigniting discussions about the "altcoin season." Although sentiment is still in a neutral zone, signals from both technical and capital perspectives suggest that the next round of altcoin market activity may be on the way.
The Federal Reserve (FED) interest rate cut expectations become a market catalyst
(Source: CME Fed Watch)
According to the CME Fed Watch tool data, the market expects a 97.6% probability that the Federal Reserve will cut interest rates by 25 basis points at the meeting on September 17. This expectation is influenced by the recent 0.9% increase in the U.S. Producer Price Index (PPI), partly due to the domestic prices driven up by tariffs imposed by the U.S. on major countries.
In the coming week, the non-farm employment and unemployment rate data will be released first, followed by the August PPI announcement on September 10. These data will directly impact the Federal Reserve's final decision. If interest rate cuts become a reality, it will lower the cost of capital and attract more capital inflows into risk assets such as cryptocurrencies.
Bitcoin's dominance declines, funds shift to alts
(Source: Trading View)
Bitcoin's dominance is an important indicator of the proportion of BTC in the overall cryptocurrency market capitalization. As of September 4, BTC dominance has fallen from the annual high of 65.91% on June 26 to 58.47%.
Meanwhile, the total market capitalization of cryptocurrencies excluding BTC (TOTAL 2) remains above 1.5 trillion USD and has formed a symmetrical triangle pattern on the daily chart. If it breaks through the 1.69 trillion USD peak set on August 14, the market will enter a price discovery phase, and alts are expected to usher in a full-scale explosion.
However, if it falls below the 1.5 trillion dollar support, the technical pattern and the possibility of an altcoin season will be challenged.
The altcoin season index indicates that the market has passed the halfway mark
The CoinMarketCap altcoin season index shows that currently, 53 alts have outperformed BTC in the past 30 days, while to reach the official definition of "altcoin season," there must be 75 coins that outperform BTC.
This means that although alts have shown relative strength, the market has not fully entered a phase of full outbreak. The Fear and Greed Index is currently at 44, indicating a neutral sentiment, volatility has returned, but it has not yet reached the FOMO (Fear of Missing Out) stage.
Interest rate cuts and capital rotation may become key triggers
Historical experience shows that when BTC's dominance decreases and market liquidity increases, funds often flow into high Beta altcoin assets. If the Federal Reserve (FED) lowers interest rates, combined with a warming market sentiment and technical breakthroughs, the altcoin season index is expected to quickly approach the critical value of 75, triggering a comprehensive market rally.
In the short term, investors should pay attention to the following three signals:
BTC's dominance continues to decline - funds are rapidly flowing into alts.
TOTAL 2 breaks 1.69 trillion USD — Technically entering the price discovery phase.
Market Sentiment Index breaks 50 — Investor risk appetite increases.
Conclusion
The Federal Reserve (FED)'s interest rate cut expectations have become the core catalyst driving the rotation of funds in the crypto market. As BTC's dominance falls below 60% and the market capitalization of alts remains high, technical and funding signals are paving the way for a potential altcoin season. If sentiment and the macro environment improve in tandem, the coming weeks may witness a comprehensive altcoin rally. Investors should closely monitor changes in market sentiment and key technical level breakthroughs to position themselves in potential targets in advance.