Is an Altcoin Season Coming in September? Three Key Catalysts to Watch

Speculation about a potential altcoin season has intensified as July comes to a close. The recent Bitcoin (BTC) rally above $123,000 triggered a mini altcoin season this month, piquing the interest of investors and sparking debates across the crypto community. However, the key question now is whether this momentum can be sustained and evolve into a more prolonged and significant altcoin season in September. Several key factors could act as catalysts to fuel this scenario.

What the Altcoin Season Index Says

The altcoin season index, an indicator designed to track the pace of the altcoin rally, saw a significant increase to 60% on July 1. However, this momentum was short-lived, as the index soon dipped below 50% after BTC fell below the $120,000 threshold.

This move mirrored previous trends observed in 2023 and early 2025. In those periods, the indicator consolidated near 50% for about two months before either making a significant advance or fully retracing the altcoin run. If the altcoin season index follows a similar trajectory in the current cycle, there are three potential catalysts that could inject new momentum and fuel the next altcoin rally in September.

Federal Reserve’s Interest Rate Cuts

As previously discussed, the U.S. Federal Reserve has maintained interest rates within a range of 4.25% to 4.5% since December 2024. This stance suggests a cautious approach from the central bank, despite calls from U.S. President Donald Trump to lower rates.

The market currently anticipates that the Fed will leave interest rates unchanged at the July 30 meeting. Most economic data remain in good shape. For instance, the unemployment rate is relatively low at 4.1%, while stock markets have reached all-time highs.

However, trade tariffs are likely to continue feeding into higher consumer prices, according to economic forecasts and business surveys. This situation has complicated the outlook for the central bank.

Federal Reserve Chair Jerome Powell previously stated that the Fed might have already cut rates if not for Trump’s volatile tariff policy. There is currently a 63.6% probability of a 25-basis-point cut in September. This signaling of a shift in expectations could have a significant impact on altcoins and the broader crypto market, potentially marking the beginning of a new altcoin season.

Passage of the CLARITY Act

The passage of the CLARITY Act is another key factor that could boost the altcoin and crypto market in general. The CLARITY Act aims to establish a clear distinction between commodities and securities within the crypto sector.

Bitcoin saw a surge above $120,000 following the enactment of the GENIUS Act. Therefore, the passage of a broader, more comprehensive market structure bill like the CLARITY Act could spark significant rallies for both BTC and altcoins, fueling a potential altcoin season.

Lawmakers have set the end of September as the deadline for passing the CLARITY Act. Another important aspect to note is that the current snapshot of the altcoin season showed that the conditions needed for an upward wave were still intact.

Notably, the ETH/BTC ratio, which tracks ETH’s relative strength against BTC, remained at recent highs. Additionally, BTC and USDT dominance retreated lower. This suggests that altcoins recovered modestly, with enough stablecoin liquidity to drive a significant rally.

Approval of Altcoin ETFs

The third key factor that could fuel an altcoin season in September is the potential approval of an altcoin-based exchange-traded fund (ETF).

As covered in a recent report, Bitwise filed a related application with the State of Delaware to list a spot NEAR ETF. The asset manager also worked simultaneously to receive approval for multiple altcoin ETFs, including Solana (SOL), XRP, and Dogecoin (DOGE).

Meanwhile, other asset managers, including Grayscale, ProShares, and Franklin Templeton, have also submitted applications to launch SOL and XRP ETFs. Market analysts have forecasted that the SEC could approve an altcoin-based ETF by October 2025. However, any positive signals or a potential speeding up of this timeline could act as a major catalyst, unleashing renewed interest and capital into the altcoin market and marking the start of a long-awaited altcoin season. The combination of these three factors creates a potentially very bullish scenario for altcoins in the near future.

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Conclusion: Preparing for an Altcoin Season in September?

The confluence of a possible interest rate cut by the Federal Reserve, potential regulatory progress with the passage of the CLARITY Act, and the growing expectation of altcoin ETF approvals creates an intriguing backdrop for the crypto market in September. While an altcoin season is never guaranteed, these catalysts present a strong case for renewed optimism in the altcoin space. Investors and market enthusiasts will be watching these developments closely to determine if September will mark the beginning of an exciting new altcoin season.