Whether the altcoin season will occur in 2026 depends on these conditions

The wave of cryptocurrency ETFs has been shaking up financial markets in recent days, indicating that institutional investors are gradually shifting their focus from Bitcoin (BTC) to altcoins.

This shift has sparked many discussions about the possibility of a new “altcoin season” thanks to the growing appeal of ETFs. However, despite these expectations, a leading market analyst has noted that a true altcoin season can only occur when several key conditions are met.

According to this expert, those conditions will play a decisive role in determining whether the coming months become a significant turning point for the entire cryptocurrency sector.

Momentum from Cryptocurrency ETFs: The Decisive Factor for Altcoin Season

The wave of activities related to cryptocurrency ETFs has profoundly changed the market landscape, exceeding many people’s expectations. Excitement surrounding new ETF approvals has led investors to not only focus on Bitcoin but also shift their attention to altcoins, raising hopes for an upcoming altcoin season.

In a recent post on social network X, expert Shanaka Anslem Perera stated that previously, institutional capital flows were mainly poured into Bitcoin, making it difficult for altcoins to attract attention. However, this trend has changed as billions of dollars are now concentrated in BTC-related products.

According to his analysis, the market’s shift from Bitcoin to Ethereum and then to smaller tokens has fueled expectations for an altcoin season. In addition, the continuous inflow of funds into cryptocurrency ETFs also reflects growing institutional interest in altcoins alongside BTC.

Perera emphasized that the altcoin sector has been under immense pressure as over one million new tokens were issued in 2024. Most of these failed quickly, draining market liquidity. Furthermore, on-chain transparency has created a fiercely competitive environment, as traders constantly copy each other’s signals, causing individual conviction to decline.

All these factors once led many to believe that altcoins were on the brink of “extinction.” However, Perera believes the situation reversed in 2025 when dozens of altcoin ETF applications appeared. Of these, more than 30 ETFs were approved, attracting nearly $6 billion in institutional inflows.

In addition, Bitcoin’s market dominance also dropped sharply, from over 65% in June to about 58% in November. According to him, this indicates that institutional investors are shifting their focus to altcoins through newly launched ETFs.

Altcoin Season Depends on Bitcoin Dominance | Source: CoinMarketCap## Institutional Adoption and Supply Pressure: The Decisive Battle for Altcoin Season

Nevertheless, Perera warns that altcoin supply remains a major risk. He noted that in the near future, token unlocks are expected to exceed $3 billion per month. Typically, the prices of these tokens drop an average of 18% after each unlock.

In his assessment, altcoins can only recover if investor demand is strong enough to absorb new supply faster than it is issued. This expert believes the future of the altcoin season will depend on two key indicators:

1. Altcoin ETF inflows (excluding BTC-related funds) must reach over $1 billion per week. By Q4 2026, total inflows into altcoin ETFs need to reach at least $50 billion to confirm the start of the altcoin season.
2. The total value of tokens unlocked monthly must remain below $5 billion. If these two conditions are met, Perera forecasts that altcoin dominance could stabilize between 15-25% by the end of 2026.

Conversely, if supply continues to far outpace demand, he warns that altcoin dominance could fall below 10%, leaving only Bitcoin and Ethereum as attractive options for large institutional investors.

In other words, if the above conditions are not met, any expectations of an explosive altcoin season will be difficult to realize.

Mr. Giao