Altcoin Season Starts as Ethereum Dominance Shows Reversal

Ethereum Strength Wanes as Altcoins Signal Market Rotation

Early signs of rotation are apparent in the cryptocurrency market, as Ethereum dominance is at 13.74% after reclaiming the level at $4,800. CoinGecko shows that Bitcoin is still the leading currency with 57.02% dominance, and the aggregate Other category is at 24.81%.

The cryptoELiTES chart on Other Dominance vs ETH illustrates that the dominance is about 0.53%, sitting on a long-term rising support line. Altcoins outperformed Ethereum in past market cycles, with recovery following bounces off of this level toward 1.0-1.1%, suggesting the presence of much stronger performance in altcoins in these periods.

Others. Dominance Vs ETH

If a similar rebound occurs, “Others” could experience a sharp surge in dominance, confirming a structural shift. This would mark the beginning of altcoin season, in which money would flow from Ethereum into lower-cap assets.

The crypto has already had a robust run-up against most of its peers, yet this structural chart indicates that its relative strength could be maturing. As the downside momentum in the dominance of the Other seems to have exhausted itself, the market might be ready to enter the next rotation phase in support of the altcoins.

ETH/BTC Ratio Strengthens but Rotation Signs Are Emerging

The top altcoin has been strong in its position against Bitcoin, and the ETH/BTC ratio increased by 60% this quarter to the highest point in a year. This strength highlights why Ethereum is the top altcoin despite macroeconomic and regulatory risks that are bearing down on digital assets.

More so, the top altcoin has also been promoted by institutional activity. DATCOs and other large buyers have been reported to accumulate 2.57% of the total Ethereum supply over the past few months. These large purchases create an upward pressure and long-term support, which reduces ETH susceptibility to severe corrections.

ETH/BTC analysis : Source : X

But history indicates that this relative ETH strength is frequently a precursor to wider altcoin booms. Continued profits in ETH/BTC have the potential to stabilize the market share of Ethereum, which subsequently enables the rotation of capital into more risky altcoins.

The existing structure shows that Bitcoin continues to dominate the market by an overwhelming market share, yet its market share of about 57% is enough to trigger declines. A decline under 55% with the token remaining stable would create the environment to have a complete altcoin season.

Altcoins Record Stronger Gains and Rising Volumes Across Majors

Already, evidence of rotation is appearing in the performance of several major altcoins. ETH is still trading well at $4,611.95, up 1.44% this day with an enormous $121.90 billion worth of trading volume. However, smaller tokens are recording greater aggression on the upside and in trading.

Solana has skyrocketed 8.42% in one day to a high of $210.77, and a strong volume of $41.31 billion. HYPE has also reported a day-to-day rise of 5.56% and a 37.68% rise over the week, highlighting a rising investor interest in risk. Meanwhile, SUI rose 1.98% to $3.50, supported by $4.7 billion in 24-hour volume of trade.

Heatmap and gainers data also support these dynamics, with altcoins such as SOL, SUI, and ADA performing better than both Bitcoin and Ethereum on shorter periods. XRP is also on the move with a daily trading volume of $9.08 billion, which is also a part of the growing altcoin movement.

These performance indicators point to a common trend in which capital first enters Bitcoin and Ethereum and then circulates to high-beta altcoins. The greater percentage increase of Solana, Hype, and Sui indicates that traders are positioning to outperform ETH.

The structural charts and live data, together, indicate a growing altcoin season. Ethereum seems to have reached maturity, and smaller tokens are starting to gain more flows and more price growth. Assuming that dominance levels keep changing the way they did in previous cycles, the larger altcoin may soon experience a long period of overperformance.