The fourth quarter of 2025 was a challenging period for the cryptocurrency market, and most major assets ended the year with losses.
Despite fear and caution driving the market, some analysts believe a recovery may come. Market experts have identified three key signals that could indicate the starting point for a potential altcoin season in 2026.
Bullish divergence can signal a possible reversal for altcoins
The first important signal is that positive divergences have formed on the weekly charts for several altcoins. This occurs when the price reaches new lows, but indicators like the Relative Strength Index (RSI) show higher lows. This suggests that selling pressure is decreasing and increases the chances of a trend reversal.
Cryptocurrency analyst Michaël van de Poppe pointed this out and mentioned Optimism, Arbitrum, Near, and Avalanche as examples. According to him,
'The weekly chart is one of the strongest timeframes to build this. This is the year for the entire Web3 industry. Not for commodities.'
Altcoin dominance is approaching a breakout in a multi-year pattern.
The second indicator is the Others.D index. It shows the total market dominance for all cryptocurrencies outside the top ten based on market capitalization.
In practice, this excludes Bitcoin, Ethereum, other major assets, and the largest stablecoins, providing a picture of the strength of the altcoin market. Analysts say that Others.D is almost breaking out from a multi-year declining wedge.
Analysts see this as a potentially positive structure. A breakout above the upper trendline usually means that buyers gain control, which can lead to a trend reversal or a long-term increase.
According to data from Bitcoinsensus, Others.D was around 6.88%, indicating that there is room for increase if a breakout occurs. The analysis pointed to 13.77% as an upward target.
In a separate post, Bitcoinsensus highlighted that Bitcoin Dominance has shown signs that an altcoin season may be on the way.
Trading in altcoins is increasing despite weak prices.
The last signal comes from data on trading volume on centralized exchanges. The share of altcoin volume, outside of the five largest cryptocurrencies, is 'significantly higher' compared to other cycles, according to on-chain analyst CW8900.
'Someone says there is no altcoin season this cycle. But on-chain data shows that trading of altcoins is more active than ever before,' said the analyst.
This high activity remains even as prices fall and retail investors leave the market. The market observer said that,
'Altcoin dominance has shifted to major players, who will raise prices to maximize their profit during this bull market.'
Despite these signals, skepticism remains high. Crypto Twitter has low expectations for a broad altcoin success similar to previous cycles. Bitget CEO Gracy Chen said in October that an altcoin season is hardly expected to come in 2025 or 2026.
With positive technical signals but lingering doubts, the coming months will show whether these patterns indicate a lasting price increase or if they just continue as signals without real effect.