The crypto market is caught between two powerful narratives. While Bitcoin captures headlines by decisively breaking the $120,000 barrier, a potentially seismic catalyst is brewing in the background that could ignite the long-dormant altcoin market.

Main Market Movement

Bitcoin is flexing its strength, pushing above $121,000 for a solid 10% weekly gain. This move isn't just speculative froth; it's backed by strong on-chain fundamentals. Glassnode's Accumulation ([accumulation developments]) Trend Score recently climbed to 0.62, a figure that indicates a clear market-wide shift towards buying and holding. The market, as a whole, is in a net accumulation phase.
However, a closer look reveals a fascinating divergence. While the broader market is buying, the largest whales—entities holding over 10,000 BTC—have remained in a state of distribution, continuing a selling trend that began in August. This suggests smaller institutions and sophisticated retail investors are absorbing the supply from the market's oldest and largest players, creating a tense but bullish setup.
This renewed market vigor is happening alongside continued institutional adoption. In a significant move, Japanese financial giant Nomura's crypto arm, Laser ([laser developments]) Digital, announced plans to apply for a crypto license in Japan. An executive noted their "optimism in the Japanese digital-asset ecosystem," signaling that major TradFi players see long-term value and regulatory clarity in key global markets.

Protocol-Specific Analysis

While Bitcoin's rally provides a stable foundation, the real story for DeFi investors may be the potential for a historic altcoin season. Former President Trump has floated a proposal to distribute tariff revenue directly to Americans, describing the potential $2,000 payments as a "dividend to the people of America." This has analysts drawing immediate parallels to the 2020-21 stimulus-fueled bull run.
During that period, a flood of retail capital entered the market, and the effect on crypto was dramatic. Bitcoin's market dominance plummeted from 73% to just 39% in six months as investors rotated profits and new cash down the risk curve into altcoins ([altcoins developments]). We are seeing the perfect setup for a repeat performance.
So far in 2025, altcoins have been a story of significant underperformance. The CoinDesk 20 Index, which tracks the largest cryptocurrencies, has soared 48%. In stark contrast, the CoinDesk 80 Index of smaller, next-largest tokens has lagged, with the CD20 outperforming it by nearly seven times. This massive performance gap suggests altcoins are a coiled spring, waiting for a catalyst to unleash their potential.
We can already see signs of life in retail-favorite protocols. Dogecoin (DOGE), for example, is showing notable strength. After a dip to $0.251 that saw selloff volumes peak at 666M tokens, the price has firmly anchored ([anchored developments]) above that support. Traders are now watching for a break of the $0.264 resistance level. Tellingly, a late-session volume spike of 33.1M tokens was identified as institutional liquidation, indicating that even memecoins now have a diverse ecosystem of large and small players actively trading them.

What This Means for DeFi

The confluence of a strong Bitcoin, institutional interest, and a potential retail stimulus check creates a highly speculative but opportunity-rich environment for DeFi. The implications are clear and multi-faceted:

  • A Massive Capital Rotation: Should the "dividend" payments materialize, we can expect a significant flow of capital into the crypto ecosystem. History shows this capital doesn't just stop at Bitcoin; it quickly seeks higher beta returns in DeFi, Layer-1s, and memecoins.
  • The "Catch-Up" Trade: The 7x underperformance of altcoins versus their large-cap peers is the single most compelling chart for those anticipating an altcoin season. This isn't a sign of weakness but rather a measure of untapped potential energy.
  • Bitcoin as the Bedrock: Bitcoin's ascent above $120,000 is crucial. It acts as the market's primary psychological anchor and capital on-ramp, bringing in new attention and liquidity that will eventually trickle down into more speculative assets.
    The market is at a fascinating inflection point. The strength in Bitcoin provides a safety net, while the lagging altcoin sector, combined with a powerful macro catalyst, presents the possibility of explosive, life-changing gains.
    For now, all eyes are on two things: the political developments around the proposed stimulus and the Bitcoin dominance chart. If dominance begins to break down from its current levels, it will be the clearest signal that the great altcoin rotation has finally begun.