After a challenging year in 2025 in the altcoin sector, hope is growing among investors for the potential of the first altseason in 2026. This speculation includes not only established altcoins but also memecoins that have struggled throughout the past year.
Understanding Altcoin Cycles
The latest posted on social media platform X (formerly Twitter), Bull Theory analysts analyzed the key factors needed for the altcoin to explode this year.
One important point highlighted is that altcoin cycles are not random. Historically, they tend to start when Bitcoin (BTC) and other cryptocurrencies go down and start to break out.
For example, in the fourth quarter of 2016, the ALT/BTC ratio it reached its lowest point before experiencing a breakout, leading to a strong rally for the altcoin in the first half of 2017.
A similar pattern emerged in late 2020, leading to a major gain for altcoins in early 2021. This established a clear downward trend followed by a breakout, where altcoins outperformed Bitcoin.
ALT/BTC Ratio Shows Signs of Recovery
Currently, the ALT/BTC ratio is stuck in a downtrend for almost four years. Technical indicators suggest a potential reversal; i Relative Strength Index (RSI) is at its most oversold level in history, while the Moving Average Convergence Divergence (MACD) is turning green for the first time in 21 months, indicating the possibility of a bullish crossover.
These signs suggest that the downtrend may reach the bottom in the fourth quarter of 2025, setting the stage for a potential breakout reminiscent of the previous altcoin run.
Analysts also drew attention to the connection between these assets and the stock market, especially the Russell 2000 indexwhich recently fell above the previous high. This indicator reflects the broad appetite for risk among investors and has historically served as a precursor to altcoin rallies.
Both in late 2016 and late 2020, the Russell breakout was followed by significant altcoin gains. Now, as the Russell 2000 has broken out again in the fourth quarter of 2025, it is showing the patterns seen just before the previous altcoin surge.
Development of Market Conditions
Despite these promising signs, some may wonder why this cycle seems to be delayed. Many investors expected the altcoin season to set in 2024, but analysts note that the main triggers they weren’t there at the time.
Factors such as the Federal Reserve’s (Fed)’s contracted balance sheet, strong capital purchases, and low risk appetite dampened enthusiasm. However, conditions began to improve towards the end of 2025, suggesting that while the cycle may have changed, it is still very much intact.
Finally, Bull Theory analysts conclude that the anticipated altseason is approaching based on the fact that the ALT/BTC ratio seems to have decreased in Q4 of 2025, the Russell 2000 gained prominence at the same time, the economy has been developed, and major regulatory clarifications are expected to reach 2026.
Ethereum (ETH), the market’s leading altcoin, is trading at $3,200, with record gains of nearly 10% over the past seven days. However, this has outperformed XRP, which has recorded a remarkable 21% gain over the same period.
Featured image from DALL-E, chart from TradingView.com
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