Ethereum's rising strength against Bitcoin could spark a fresh altcoin wave, with key signals showing market rotation is finally starting.
As ETH breaks above support, altcoins may shine again, but gains will likely focus on sectors with real momentum and active narratives.
With Bitcoin near $120K, many traders now eye altcoins for better returns, signaling the start of higher-risk moves this summer.
Ethereum may be signaling the start of an altcoin rebound, according to crypto analyst Daan Crypto Trades. After months of underperformance against Bitcoin, the ETH/BTC ratio is finally showing signs of life. The ratio recently flipped its market structure and climbed above the Bull Market Support Band.
This shift suggests Ethereum could once again lead altcoin strength, a pattern seen during past market cycles. ETH trades near 0.0265 BTC, just under the key 0.026 weekly close target needed to confirm a stronger breakout.
ETH's Role as Altcoin Leader Returns
Ethereum is still the strongest indicator of the health of the altcoin industry, Daan emphasized. Solana's strong performance this cycle didn't help the altcoin market as a whole. But when Ethereum outperforms Bitcoin, it has regularly sparked market-wide rallies.
Source: Daan Crypto Trades
Additionally, after approaching 70%, Bitcoin dominance (BTC.D), which often indicates altcoin rotation, has begun to decline. The momentum shift indicates that a window is opening for alternative tokens, however confirmation is still awaited.
Altcoin Rotation Could Gain Steam in Summer
Daan expects Bitcoin to trade sideways during summer, around the $120K level. That could push investors down the risk curve toward altcoins. Many believe Bitcoin’s upside is limited at current levels, which makes alts more attractive for better returns.
However, Daan cautioned that any rally would likely focus on specific narratives, not the entire altcoin market. Sectors with momentum could see rotating capital flows, creating short-term breakout opportunities.
The analyst shared his personal allocation strategy. He’s currently 80% in Bitcoin and 20% in altcoins. But if strength continues, he plans to shift toward a 50/50 split. Still, he stressed the importance of sticking with strong-performing coins and avoiding laggards.
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