Ethereum is having a serious moment right now, and CoinGecko recently pointed out that Ethereum’s market dominance has jumped to 20.8% from 17.5% back in May. It’s a noticeable rise, especially as Bitcoin’s dominance starts to wane, and capital is beginning to flow into altcoins faster than we’ve seen in previous cycles.
The capital rotation from Bitcoin (BTC) into Ethereum (ETH) is a key sign of what’s known as “altseason.” This is when investors pivot from BTC, especially after Bitcoin’s solid run, into Ethereum before dabbling in other large-cap altcoins. The ETH/BTC trading pair has risen by a solid 14% since May, showing just how much more action Ethereum is getting.
Macro Conditions & Institutional Players
If you look at the Altcoin Season Index, which tracks the performance of the top 50 altcoins against Bitcoin, it’s been showing a V-shaped recovery lately. Currently sitting at about 40, it’s clear that investor interest in altcoins is ramping up faster than past cycles, though it’s still short of the 75-point mark needed to declare a full-blown altseason.
Now, here’s where it gets interesting: Ethereum’s daily trading volume has soared 38% to $22.4 billion over the past month, with open interest in ETH derivatives hitting $12.1 billion, the highest since March 2024. I think this means Ethereum is on a serious upswing, and if history has taught us anything, these kinds of open interest surges typically lead to faster price rallies across the market.
It’s not just the charts that are showing promising signs, macro conditions are playing a big part. With softer job creation, cooling inflation, and whispers of interest rate cuts from the Federal Reserve later this year, liquidity is on the rise. And when liquidity increases, well, that’s when altcoins tend to really shine.
But there’s another twist, institutional players are fueling this rally too. Large wallet holders are rotating out of Bitcoin and into Ethereum, Solana (SOL), and Chainlink (LINK). Unlike 2021’s retail-driven surge, this current cycle is being steered by professional capital looking for high-risk, high-reward assets with solid narratives.
Finally, the liquidity indicators are also signaling an altcoin rally. The global M2 money supply is growing at its fastest rate since early 2021, which, let’s not forget, was one of the best altseasons we’ve had. With improving technical indicators and growing liquidity, it looks like Ethereum and other altcoins could be in for even more explosive gains.
So, if you’re not paying attention to Ethereum and the altcoin market right now, you might be missing out on what could be the beginning of something huge!
Roman Zaika
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