Rapidly Struggling Cryptocurrencies: However, a Rapid Recovery May Be Imminent
The cryptocurrency market is showing early signs of a shift towards altcoins, with Ethereum (ETH) leading the charge. According to crypto analysts, this potential shift could mark the beginning of an altseason, a significant phase of the market cycle.
Ethereum at the Forefront
Ethereum is being described as the "tip of the spear," leading this potential shift in the market. The broader altcoin market often moves in tandem with the ETH/BTC pair, which has rallied about 75% since its May lows and recently broken out of a downtrend. This breakout is considered one of the "altseason triggers" and a key milestone before a full rotation into altcoins accelerates.
The Approach of Phase 2
The shift toward a true altseason has yet to materialize in any meaningful way. However, key indicators suggest that we may be approaching Phase 2, where Ethereum starts outperforming Bitcoin. These indicators include Ethereum gaining strength relative to Bitcoin and Bitcoin dominance dropping below 60%. Currently, the Altcoin Season Index is around 50, short of the 75+ level that signals a full altseason.
Macroeconomic and Institutional Factors
The timing of the true altseason will be heavily influenced by macroeconomic shifts and institutional developments. Factors such as collapsing odds of a September 2025 rate cut, tightening liquidity, and institutional developments like potential crypto ETF approvals and regulatory clarity expected in late 2025 may either accelerate or delay the onset of a true altseason.
A Look Ahead
In summary, the market is in early rotation towards altcoins but not full altseason yet. Watching the ETH/BTC price action near historical resistance and Bitcoin dominance levels can provide the best indication of when a "true" altseason begins. The current trends reveal only a mild altcoin reaction, which is far less pronounced than earlier phases. However, the analyst believes that altcoins could deliver significant surprises once they gain momentum.
[1] Swissblock's Altcoin Vector found a renewed acceleration in the altcoin market could be underway, driven largely by Ethereum's recent strength.
[2] CryptoQuant stated that a significant surge resembling a "true" altseason occurred in early 2024, when mid- and small-cap assets briefly outperformed Bitcoin.
[3] Analysts note that Ethereum leading BTC is the hallmark of Phase 2 in the altcoin cycle, which precedes the broader altcoin rally.
[4] In late 2024 and early 2025, a second phase of altcoin performance emerged, though Bitcoin retained dominance.
[5] The analyst argues that the current cycle will not end without an altseason. The key resistance level of 0.035 for the ETH/BTC pair needs to be cleared for a potential "Positive Impulse" across the market.
- Amid the growing shift towards altcoins, Ethereum's recent strength has sparked renewed acceleration in the altcoin market, as suggested by Swissblock's Altcoin Vector.
- Previously, in early 2024, a significant surge akin to a "true" altseason occurred when mid- and small-cap assets temporarily outperformed Bitcoin, according to CryptoQuant.
- According to analysts, Ethereum leading Bitcoin in performance is a telltale sign of Phase 2 of the altcoin cycle, which typically preludes a broader altcoin rally.
