Just recently, market participants were preparing for a prolonged crypto winter*. Now Bitcoin is testing the $81,000 level, Ethereum is rising even faster, and large investors are returning to cryptocurrency funds. Has the market really entered a new bullish cycle, and when will altcoins have their turn?
* Crypto winter — a prolonged downturn in the cryptocurrency market during which the prices of most digital assets remain significantly below their previous highs. A crypto winter is usually accompanied by declining trading volumes and investment, waning interest among retail and institutional participants, bankruptcies or shutdowns of individual projects, and an overall deterioration in market expectations. Unlike a short-term correction, it may last for several months or years.
BTC reaches $81,000 as optimism returns to the crypto market
* Altcoin season — a period during which a significant share of altcoins delivers higher returns than Bitcoin. Altcoin season usually occurs when, following a rise in BTC, investors begin reallocating their profits to Ethereum and other cryptocurrencies in pursuit of higher returns. This capital rotation may be accompanied by increased altcoin trading volumes, growth in their combined market capitalization, and a decline in Bitcoin dominance.
For now, however, the market is in no hurry to confirm this scenario. Capital has not yet begun flowing en masse from Bitcoin into altcoins, and the leading cryptocurrency still commands most investors’ attention.
A new wave of optimism emerged after the BTC price exceeded $81,000. Against this backdrop, analysts began discussing the formation of another bullish trend*. At the same time, a reversal began to take shape in traditional financial markets, with investors reallocating funds from the artificial intelligence sector to Bitcoin and gold.
* Bullish trend — a sustained upward market movement in which the value of an asset generally increases and investors expect further growth. The term refers to the movement of an attacking bull, which thrusts its horns upward at its opponent.
One factor behind Bitcoin’s rally was the US Department of the Treasury’s decision to increase the volume of buybacks of long-term government bonds. This helped lower Treasury yields and weaken the dollar, improving conditions for assets with limited supply, which investors consider to include Bitcoin and gold. The current rise is therefore being supported not only by sentiment within the crypto industry but also by changes in global financial markets.
Since August 17, the total capitalization of the cryptocurrency market has increased by more than 22%. Bitcoin (BTC) and Ethereum (ETH) have been the main drivers: the leading cryptocurrency gained 25%, while the second-largest rose by 30%. Both coins reached their highest levels since May of this year.
The sharpness of the move was amplified by the closing of short positions. As the price rose rapidly, traders who expected BTC to fall were forced to buy the cryptocurrency to meet their obligations. This chain reaction is known as a short squeeze: forced purchases drive the price even higher.
From crypto winter to euphoria: Bitcoin is tipped for a historic surge
Just two weeks ago, major industry participants were calling the situation the most severe bear market cycle* in the history of the crypto market. Now, a growing number of analysts believe that the downturn has ended and Bitcoin could enter the most powerful growth phase in its entire history.
* Bear market cycle — a prolonged period of declining asset prices, accompanied by weakening demand and predominantly negative investor expectations. The term refers to the movement of an attacking bear striking downward with its paw.
The behavior of large investors is also changing. Institutional investors are once again showing interest in virtually all US exchange-traded funds based on various cryptocurrencies.
Until recently, the situation looked very different. Amid subdued activity in the crypto market, exchanges and traders were turning their attention to the shares of companies associated with artificial intelligence and semiconductor manufacturing. Nvidia, SK Hynix, SanDisk, and Micron Technology were among the favorites. However, the market took only a few days to shift sentiment completely.
BitMEX co-founder Arthur Hayes has already described the current developments as the beginning of a new bull market. According to his forecast, Bitcoin could rapidly appreciate to several hundred thousand dollars and even reach $500,000. Hayes therefore considers the current period a suitable time to hold the asset.
Such long-term forecasts are based primarily on expectations of continued growth in the global money supply, weakening national currencies, and increasing demand for assets with limited issuance. Bitcoin’s supply cannot exceed 21 million coins. However, scarcity alone does not ensure that the asset will appreciate: for the price to rise, demand must grow faster than the supply available on the market.
Pete Rizzo, head of the BitcoinTreasuries analytics platform, also expects “parabolic growth.” In crypto-market terminology, this means an almost explosive price increase, with the price line on the chart rising almost vertically.
Money is moving from AI into cryptocurrencies
The renewed interest in digital assets is evident not only from their prices. Spot Bitcoin exchange-traded funds have once again entered the top ten most actively traded ETFs*, displacing funds focused on artificial intelligence companies, which had occupied the leading positions throughout the summer.
* ETF (Exchange-Traded Fund) — a fund whose shares or units are traded on an exchange in the same way as ordinary securities. A cryptocurrency ETF lets investors profit or lose with changes in the value of the associated digital asset without buying or holding the cryptocurrency itself.
Over six trading sessions, US spot Bitcoin funds attracted more than $2.5 billion. On August 24 alone, net inflows totaled about $338 million, while Ethereum funds received another roughly $116 million.
Activity is increasing beyond Bitcoin. Asset manager Bitwise reported that its exchange-traded funds based on Solana (SOL) set a new trading-volume record.
On August 24, the combined trading volume of US Solana ETFs reached a record $166.83 million, with Bitwise's BSOL fund generating more than $108 million. Net inflows into all funds in this category totaled $33.49 million, marking the best daily result since December 2025. By then, the total capital they had attracted was approaching $1.22 billion.
The range of available instruments is also expanding. Trading in an ETF based on Zcash (ZEC), the largest cryptocurrency in the privacy coin* sector, began on August 25.
* Privacy coins (anonymous cryptocurrencies, confidential cryptocurrencies) — digital currencies that use cryptographic technologies to restrict access to information about transaction participants and transaction parameters. Depending on the protocol, they may conceal the sender’s and recipient’s addresses, the transferred amount, or links between individual transactions. The term “anonymous” is conditional: absolute anonymity is not guaranteed, since the ability to identify transaction participants depends on the architecture of the particular network, privacy settings, user behavior, and the data available to exchanges and analytics services.
Eight signals out of ten: indicators turn upward
CryptoQuant analysts are already seeing the first signs that liquidity is beginning to move from Bitcoin into riskier crypto assets. Following a prolonged period of low volatility and modest trading volumes, investors are once again taking a closer look at altcoins.
The contrast is particularly striking against the platform’s previous statements. Until recently, CryptoQuant specialists described most of the altcoin market as “garbage” and warned that the segment could face one of the most difficult periods in its entire history.
The tone has now changed. According to CryptoQuant, eight out of ten indicators* used to assess the likelihood of a bull market are sending positive signals. The outlook has not been this optimistic since October 2025, when Bitcoin was trading above $120,000.
* Bitcoin Bull Score Index — a CryptoQuant metric that assesses the state of the BTC market using ten market and on-chain indicators:
Bitcoin Demand Growth shows whether the amount of BTC market participants buy and hold is increasing.
MVRV-Z Score helps determine whether Bitcoin’s current price is overvalued or undervalued relative to the average acquisition cost of the coins.
Profit and Loss Index assesses whether most Bitcoin is currently in profit or at a loss relative to its purchase price.
Bull-Bear Market Cycle Indicator determines which phase currently predominates: growth or decline.
Inter-Exchange Flow Pulse tracks Bitcoin transfers between trading platforms and the associated changes in liquidity.
Network Activity Index measures the intensity of Bitcoin network usage, including address activity and transaction processing.
Stablecoin Liquidity shows the amount of capital held in stablecoins that could be used to purchase Bitcoin and other cryptocurrencies.
Trader On-Chain Profit Margin indicates whether short-term market participants are moving and selling BTC at a profit or a loss.
Trader Realized Price shows the approximate average acquisition cost of Bitcoin held by short-term holders.
Technical Signal evaluates BTC price dynamics using price data and technical analysis methods.
In just one week, the Bitcoin Bull Score rose from 30 to 80 points. Importantly, demand began increasing simultaneously in the spot and derivatives markets — a combination CryptoQuant had not recorded since early October 2025.
Nevertheless, analysts consider a weekly close above the 365-day moving average, currently at approximately $83,000, the key confirmation of a new bullish regime. As long as price remains below this threshold, the market may still be in a powerful recovery rally rather than a definitive reversal of the long-term trend.
Altcoins are waiting for their turn
Optimism in the market has increased noticeably, but the figures still caution against rushing to conclusions. The current move can still be seen as a strong rebound from this year’s lows rather than the clear start of a new global cycle.
Even after gaining approximately 20% over the week and returning to $80,000, Bitcoin remains almost 40% below the record high set in October 2025. Since the beginning of the year, BTC is still down about 10%.
The Altcoin Season Index also does not confirm the start of a full-fledged altcoin season. As of August 26, it stood at 39 points, down from 67 at the beginning of the month.
The index compares Bitcoin’s returns with the performance of the top 50 cryptocurrencies by market capitalization over the previous 90 days. The index excludes stablecoins and wrapped tokens from the calculation.
The index ranges from 0 to 100. Altcoin season begins when 75% of the cryptocurrencies included in the calculation outperform Bitcoin. In that case, the index must reach at least 75 points. If fewer than one-quarter of the coins manage to outperform BTC, the market remains in Bitcoin season.
Another argument in favor of the leading cryptocurrency is Bitcoin dominance*, which remains at approximately 60%. As long as it stays at such a high level, it is premature to speak of investors switching en masse to altcoins.
* Bitcoin dominance — BTC’s market capitalization expressed as a percentage of the cryptocurrency market’s total capitalization. The metric is calculated by dividing Bitcoin’s capitalization by the combined value of all crypto assets included in the calculation. Rising dominance usually means that BTC is appreciating faster than most altcoins or retaining its value better during a market downturn. A decline may indicate capital is flowing into alternative cryptocurrencies, but it does not, by itself, prove that an altcoin season has begun.
The ETH/BTC ratio, which shows Ethereum’s value in Bitcoin, provides a more encouraging signal. Since its June low, the ratio has risen by approximately 32% and reached a seven-month high. This means that Ethereum has already begun outperforming BTC. However, the simultaneous rise in Bitcoin dominance suggests capital remains concentrated in the two largest cryptocurrencies rather than spreading across the broader market.
A full-fledged altcoin season usually develops in several stages. Bitcoin rises first, after which some of the profits flow into Ethereum and other large-cap coins. Capital then spreads to projects with medium and small market capitalizations. Judging by the ETH/BTC dynamics and the high dominance of the leading cryptocurrency, the current market is only between the first and second stages.
Nevertheless, individual cryptocurrencies and entire industry segments may continue to rise. Many experts believe that the market is entering a new stage in which the value of digital assets will depend more heavily on projects’ actual revenue and other financial results, rather than solely on expectations and speculative interest.
Bitcoin has therefore already returned to the center of the major investment game, but altcoin season remains more expectation than accomplished. For the market to truly come under the control of altcoins, growth in BTC and Ethereum alone will not be enough: Bitcoin dominance will need to decline noticeably, while most major coins will need to demonstrate sustained outperformance of the leading cryptocurrency.