Are altcoins cooling down this season? Three potential catalysts may trigger a rebound in altcoin market by the end of Q3.

The surge in alt season triggered by Bitcoin breaking through $123,000 has cooled down, and the alt season index has retreated. However, historical patterns indicate that a two-month consolidation may be necessary, as the market awaits three key catalysts: the Fed's interest rate cut expectations, the passage of the CLARITY Act, and the approval of altcoin ETFs (including SOL and ETH staking products), which may ignite a new round of altcoin price pump by the end of the third quarter.

The momentum of the alt season weakens, the index falls below the critical point Bitcoin (BTC) soared to $123,000 after the passage of the GENIUS Act (stablecoin legislation), driving the entire cryptocurrency sector to rise and triggering a small altcoin season in July. However, as Bitcoin consolidates below $120,000, the latest wave of alt season has lost momentum. The alt season index, which measures the momentum of altcoins, surged to 60% on July 1 but has now fallen below the key level of 50%.

Historical Pattern: Consolidation Phase May Take Two Months Looking back at 2023 and early 2025, the index consolidated around 50% for about two months before choosing to break upward or completely retrace the gains of alts. So, does this time also require a similar consolidation period? And what will trigger the next round of altcoin rebound?

(Source: Blockchain Center)

Potential altcoin season catalysts preview Currently, the market is closely watching three potential catalysts that could drive the next phase of the altcoin recovery:

1. Fed rate cut expectations rise The market currently expects that the interest rate will remain unchanged at the meeting on July 30. However, the key point is that market pricing shows a 63.6% probability that the Fed will cut interest rates by 25 basis points in September. This shift in expectation could significantly impact cryptocurrencies and broader risk assets. If the Fed does cut rates in September, it is likely to create a whole new risk appetite environment, benefiting the performance of the crypto market.

(Source: CME Fed Watch)

2. Countdown to the Passage of the CLARITY Act Previously, Bitcoin reached a historic high (ATH) of over $120,000, driven by the passage of the GENIUS Act (stablecoin bill). If history repeats itself, the more comprehensive CLARITY Act (comprehensive market structure bill) is also expected to inject strong momentum into the market. U.S. lawmakers have set a deadline to pass the bill by the end of September. If the Fed cuts interest rates alongside the legislation of this bill, the end of the third quarter may become the catalyst for a significant rebound in Bitcoin and alts.

3. Expectation of altcoin ETF approval (including SOL, ETH stake) Another key catalyst could be the approval of altcoin spot ETFs, including staking products for Solana (SOL) and Ethereum (ETH). Multiple analysts have pointed out that the approval time window for such ETFs may be around October. If successfully implemented, it will bring significant incremental funds and legitimacy endorsement to the related altcoins.

(Source: TradingView)

Current market conditions: Everything is ready, just waiting for the right moment Although the recent rise has slowed down, the current snapshot of the altcoin season shows that the underlying conditions supporting a new wave of market activity remain intact:

• ETH/BTC exchange rate remains strong: The ETH/BTC exchange rate, which measures the strength of Ethereum relative to Bitcoin, remains at recent highs.
• Decline in BTC and USDT Dominance: The market cap share of Bitcoin (BTC Dominance) and Tether (USDT) has both decreased, indicating a moderate recovery in alts, and there is available stablecoin liquidity in the market to drive subsequent pumps.

Conclusion: Awaiting Catalysts, Q3 may See an Explosion In summary, the market seems to be just one suitable trigger point away from launching the next wave of the alt season. Based on the timing of three potential catalysts: the Fed's shift in monetary policy expectations, key cryptocurrency legislative processes, and the approval of innovative financial products (ETF), this September or October is likely to become a golden window period for igniting a new round of altcoin rebound. Crypto investors need to closely monitor the progress of these key events.