- Bitcoin dominance has been constantly dropping since May.
- Just a few days ago, Ethereum spot ETFs pulled in $524 million.
- Altcoins now account for 83% of futures volumes, compared to just 17% for Bitcoin.
Bitcoin dominance has been constantly dropping. During May it was near 65% and now it has dipped to 58.7%, which has caused a stir in altcoins market. This implies that the capital is beginning to flow into altcoins, which is a good sign that an altcoin season is coming.
Then, there is the most well-known altcoin, Ethereum, which is catching up to its all-time high, needing only about a 4% boost to reach that goal. This is largely fueled by big institutional interest, where just a few days ago, Ethereum spot ETFs pulled in $524 million.
Also, with growing expectations for a Federal Reserve rate cut in September and a general increase in market liquidity, altcoins are likely to see some of the biggest price jumps. They are largely known to be more volatile, so when the market is doing well, altcoins often go up much faster than the broader market.
Interestingly, according to CryptoQuant, altcoins now account for 83% of futures volume, compared to just 17% for Bitcoin. Companies like SharpLink are accumulating massive Ethereum treasuries, propelling confidence in alt-led narratives.
Additionally, there is a big investor attention on altcoins involved in AI, real-world asset (RWA) tokenization, and Layer-2 infrastructure. Some examples include Remittix, which is a new payment system, and Layer Brett, a meme coin built on the Ethereum Layer-2 network.
Related: Altcoin Season Soon? Ethereum Moons, Alts Hit Snooze
The four phases of a potential altcoin season
In the first phase, capital tends to flow into Bitcoin first, while Ethereum’s price movement lags behind. Eventually, ETH begins to climb in tandem, hinting at diversification. The second phase is when Ethereum begins to outperform Bitcoin and large-cap altcoins start to attract attention, laying the foundation for broader participation.
After Ethereum has a strong run, (more popular) altcoins like BNB and SOL would start their rally, marking the onset of third phase. As more investors feel confident in the market, these coins often have huge and fast price increases.
Finally, in the last phase, we reach a full-blown altcoin season. Large-cap cryptocurrencies experience sharp, vertical price increases, and a lot of capital inflows quickly flood into smaller coins. This phase culminates in a period of market mania, where meme coins and projects driven by intense hype cycles reach their peak.
Currently the market is witnessing third phase, in which Ethereum’s strong performance is drawing capital into major altcoins such as BNB and SOL, a trend fueled by institutional backing and their inherent utility. If this momentum continues, the market could soon enter phase four. With this the market poses a positive outlook for altcoins.
Related: Ethereum and Cardano Lead Altcoin Rally as Bitcoin Dominance Slides
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
