Bitcoin reached a new all-time high (ATH) of $118,856 on July 11 and still shows no signs of slowing down, thanks to increasing support from financial institutions.
Meanwhile, Ethereum (ETH) also reached the $3,000 mark on the same day, pushing the ETH/BTC pair close to a significant resistance level.
Technically, BTC's daily chart still leans towards the buyers, with higher lows forming since the end of June and inflows into spot ETFs continuing to pump new liquidity.
However, as BTC's dominance ratio begins to slightly decrease and Ethereum spot ETFs attracted over $1 billion in inflows just in July, traders are starting to question: will altcoins lead the next rally of the 2025 bull cycle?
A decisive breakout of the ETH/BTC pair could be the answer and reshape market strategies in the upcoming third quarter.
ETH/BTC tests a significant resistance level: Is the altcoin season approaching?
The ETH/BTC pair has experienced several years of continuous decline, slipping from a peak of around 0.08 BTC in September 2022 to a record low of nearly 0.018 BTC in April 2025.
However, the pair has finally shown signs of positive recovery, surging nearly 42% from the April low, and is currently testing the resistance area around 0.026 BTC.
Notably, ETH/BTC has risen above the short-term moving averages (20-day EMA and 50-day EMA), indicating that momentum is improving significantly.
However, the 200-day EMA along with the horizontal resistance level around 0.026 BTC has not yet been broken. This price level has halted many upward attempts over the past few months, indicating its technical importance.
A decisive close above the 0.026 BTC threshold will mark the first time ETH/BTC has surpassed the 200-day EMA in nearly a year — an event that in previous cycles often signaled ETH's outperformance over BTC.
Meanwhile, Bitcoin's dominance ratio has started to slightly decrease as the recent rally is cooling off, opening up space for ETH and other altcoins to break out.
At the same time, institutional capital is trending towards Ethereum, as Ethereum spot ETFs have attracted over $2 billion in net inflows in just the past two months.
If the ETH/BTC pair can convincingly break above the 0.026 threshold, this will trigger a phase where ETH leads the market and kickstart a 'mini altcoin season'.
Is Bitcoin's rally slowing down causing capital to rotate into altcoins?
Investor interest in Bitcoin price predictions has surged during the recent rally — a clear sign that retail traders are returning to the market. However, many experts and KOLs in the Web3 space are hoping that the altcoin season will occur soon.
In the latest tweet, Michael van de Poppe shared a chart showing Bitcoin breaking the $110,500 threshold, attracting liquidity and surging close to the historical peak of $118,000.
Van de Poppe currently predicts that Bitcoin will enter a consolidation phase following the recent strong rally. On the chart, the breakout level above $106,500 previously led to a rapid rise to $108,000, indicating that when important liquidity zones are breached, prices can accelerate very quickly.
With the $110,000 level having become support, some long-term investors are starting to take profits — a behavior that in the past has typically led to minor corrections.
However, as Bitcoin's price stabilizes, trader attention may shift to altcoins. Historically, when BTC 'cools down', capital often flows into other coins. Currently, this pattern is beginning to repeat.
Notably, the dominance ratio of ETH has increased nearly 14% in just the past two weeks.
Traders should wait for a close above the current dominance level, specifically surpassing the 200-day EMA (around 9.95%), to assess the trend change.
Thus, the actual altcoin season will still require BTC's dominance ratio to decrease further and for ETH/BTC to break out clearly.
Traders can restructure their portfolios to take advantage of the upward wave of ETH and altcoins.
If the market shows a bullish reversal signal for ETH/BTC, traders may adjust their portfolios by increasing their ETH holdings.
Specifically, increasing the proportion of ETH in the portfolio, while still holding Bitcoin as a mainstay to maintain stability.
History shows that whenever ETH outperforms Bitcoin, capital tends to flow into other altcoins. Therefore, selecting a few highly applicable altcoins, such as DeFi tokens or Layer-2 projects, could help optimize profits during a bullish market phase.
However, the key factor is timing: investors should wait until the ETH/BTC pair (and Ethereum's market cap dominance ratio) closes above the 200-day EMA.
This technical signal will confirm the reversal trend, helping investors make a more accurate restructuring decision.