Altcoin Season Ahead as Coinbase Forecasts Crypto Market Shift

According to Coinbase Institutional's August 2025 report, the crypto market is poised for a shift in leadership from Bitcoin to alternative cryptocurrencies, or altcoins, in the coming weeks. The report, authored by Coinbase's global head of research David Duong, identifies three key drivers behind this anticipated altcoin season.

Firstly, Bitcoin's market dominance has shown signs of softening after peaking earlier this year. As this measure declines, capital has historically flowed into large-cap altcoins, and then into mid- and small-cap tokens. Coinbase expects this rotation effect to become more pronounced in September.

Secondly, liquidity trends are turning more favorable for altcoins. The report notes tighter bid-ask spreads and deeper order books across major exchanges, making it easier for traders to enter and exit altcoin positions without incurring heavy slippage. Improved liquidity often encourages participation from larger players who might otherwise avoid less-traded tokens.

The third factor is investor sentiment. Coinbase states that as macro conditions stabilize and volatility remains contained, investors are more likely to seek higher returns in riskier crypto assets. This environment could foster sustained inflows into the altcoin market, particularly if Bitcoin's price consolidates rather than surges to new highs.

While Coinbase stops short of predicting which specific altcoins will lead the charge, the report highlights the pattern from previous market cycles, where blue-chip altcoins outperformed first, followed by smaller-cap assets. The duration and magnitude of the altcoin season, however, will depend on both market and macroeconomic conditions.