The latest market outlook from Coinbase Institutional suggests that a combination of macroeconomic factors, shifting investments, and growing institutional interest in Ethereum may set the stage for what is termed an 'altcoin season.'
Macroeconomic Conditions and Their Impact
David Duong, head of research at Coinbase Institutional, stated that the current setup is 'increasingly favorable' for a sustained altcoin rally as September approaches. He highlighted that significant amounts of retail cash remain parked in money market funds, capital that could enter the crypto markets if the U.S. Federal Reserve cuts rates.
Decline in Bitcoin Dominance
A notable decline in Bitcoin's market dominance has also fueled speculation of an altcoin breakout. Since May, BTC's share of total crypto market capitalization has dropped from above 65% to around 59%, marking its first monthly bearish cross since early 2021.
Altcoin Market and Ethereum
Coinbase attributes much of the current momentum to renewed institutional demand for Ethereum, alongside narratives around digital asset treasuries and stablecoins. According to Duong, the divergence between altcoin market growth and index readings could reflect a gradual, institution-led accumulation phase.
Market observers emphasize that for a true altseason to take hold, three ingredients must align: favorable macro conditions, a continued drop in Bitcoin dominance, and a fresh, compelling market narrative.
