In July 2025, after several weeks of consolidation in the crypto market, a decisive breakthrough finally arrived. BTC surged past $120,000, ETH strongly rebounded above $3,400, and multiple mainstream and sentiment-based altcoins saw 24-hour gains exceeding double digits, igniting discussions about whether 'altcoin season has returned' across the internet.
But is this market really a full bull market restart, or just another round of 'high position inducements'? Which projects are truly worth early positioning? We attempt to clarify three things for everyone:
What is the underlying logic of this round of rise?
Has the altcoin season already started? How much room is there for growth?
Which sectors/cryptocurrencies are most worthy of attention in this round of market?
1. The triple catalysts behind the market breakthrough: from 'tariff desensitization' to 'institutional accumulation'
The surge in BTC and ETH is not baseless; this round of explosion is fundamentally supported by the synchronous warming of macro sentiment and capital structure:
1. Tariff 'desensitization' and policy expectation correction
The policy pressure in this market round mainly comes from Trump's renewed trade war rhetoric. However, after several months of policy fluctuations, the market has gradually become immune to the 'tariff' issue, and an emotional turning point has emerged.
The fear index has continued to decline, and the crypto market is refocusing on 'liquidity' and 'policy shifts'. Recently, several Federal Reserve officials have released signals for interest rate cuts, reinforcing market expectations for 'autumn rate cuts', with funds beginning to position in risk assets in advance, with BTC benefiting as a high-beta asset.
2. Structural inflows driven by ETF and institutional buying
Since the approval of the spot BTC ETF at the beginning of the year, ETFs have become the 'fundamental support' driving the market upward. Recently, we have observed an important signal: not only is the BTC ETF continuing to see net capital inflows, but potential ETF targets like ETH and SOL have also shown significant signs of capital accumulation.
Data shows that several large institutions have indirectly built positions in ETH spot through market makers, with market expectations that **'the ETH spot ETF will officially launch no later than Q3 2025'**. Meanwhile, the ETF channel for the Solana ecosystem has also been opened, propelling SOL to become one of the strongest mainstream altcoins.
3. The market's short structure is weak, and the 'short squeeze market' is beginning to emerge
According to Coinglass and CoinGecko data, the total open interest (OI) across the network has surged to a historical high of $172 billion, with BTC accounting for $83 billion, ETH for $40 billion, and altcoins exceeding $50 billion, making up nearly 30%. More critically, the OI of several mid- and small-cap cryptocurrencies has surpassed their circulating market values, creating a structure of naked short accumulation—once collective stop-loss liquidations are triggered, it will lead to intense short squeezes, serving as the ignition for the 'altcoin season'.
2. ETH has become a barometer again; is the altcoin season really here?
ETH, as a barometer of previous 'altcoin seasons', has once again played a decisive role.
ETH once broke through the $3,400 mark and has outperformed BTC and SOL in the rebound since the beginning of the year, achieving a dual reversal of 'catch-up' and 'expectation recovery'. The previously questioned Ethereum Foundation has also gradually rebuilt market confidence through internal governance reforms, expanding the Layer 2 ecosystem, and enhancing on-chain activity.
Five major logics for ETH's rise:
Regulatory easing: ETH is moving away from the 'security' label, and calls for ETF approval are rising;
Institutional accumulation: Several traditional financial institutions are entering ETH spot;
On-chain data recovery: L2 activity is warming up, with active addresses and Gas fees both increasing;
Foundation reform: governance decentralization, reduced selling pressure;
Clear technical roadmap: Danksharding, Verkle trees, and other upgrade paths are steadily advancing.
The 'ignition point' of the altcoin season: structure confirmation after ETH breaks $3,400
If BTC's rise brings a 'directional signal', then ETH stabilizing at $3,400 is a green light for the capital rotation in the altcoin sector.
In the past 48 hours, several altcoins, including SUI, ARB, PEPE, PENGU, have recorded gains of over 10%-25%, with the MEME sector and new public chain ecosystems performing particularly dynamically, indicating structural market movements.
3. Sector rotation and cryptocurrency recommendations: from mainstream assets to hot sentiment
1. Mainstream main line (medium to long-term allocation recommendations)
ETH: If it can stabilize above $3,400, it will drive the overall rotation of altcoins, and it is recommended to hold it with emphasis;
SOL: The ETF launch, capital inflows, and complete technical indicators make it the strongest consensus among altcoins;
ARB: Leading Layer 2, significant recovery in TVL, recently becoming a representative of 'low valuation' by capital.
SUI: Potential high-growth public chain, with increasing on-chain ecosystem and DApp developer activity.
ONDO (Leader in the RWA sector): The biggest beneficiary of the stablecoin + government bond narrative, with strong institutional holdings and robust performance.
2. Sentiment-based assets (suitable for short-term strategies)
PEPE: An established MEME coin, extremely explosive under short squeeze structure;
PENGU: Emotion-driven project, extremely high social heat, suitable for quick entry and exit;
HYPE: expectation-based assets, narratives not fully realized, leaving room for growth;
FLOKI, WIF, and other MEME series: It is recommended to focus on capital movements and TikTok/social media traffic data.
4. Operational recommendations and strategy framework
For the current market's phase, we recommend adopting a 'three-stage' strategy approach: 'mainstream first → altcoin rotation → emotional catch-up'. From the flow of funds and market structure, we are currently at the starting point of the second stage: mainstream cryptocurrencies are warming market sentiment, and funds are beginning to spread to quality altcoins.
In terms of allocation, it is recommended that investors maintain a steady approach, with the combined position of BTC and ETH not falling below 60% of total assets. If ETH can stabilize above the $3,400 mark, it is likely to continue leading the market, while BTC remains the preferred choice for foundational allocation as a safe haven for large funds and a valuation anchor.
For investors looking to participate in the altcoin rotation, it is advisable to diversify the remaining portion of the position into projects like SOL, ARB, SUI, ONDO, which have clear fundamentals and signs of capital involvement. These assets are currently in a leading position in the rotation, offering greater certainty and mid-term potential.
In terms of short-term strategies, it is recommended to pay attention to those assets with short squeeze structures, high social heat, and strong trading activity, such as PEPE, PENGU, HYPE, etc. However, it is important to emphasize that these types of assets carry higher risks, suitable for quick entry and exit with a disciplined approach, especially setting proper take-profit and stop-loss points.
For market judgment, we suggest focusing on ETH's performance at key levels. If ETH can effectively stabilize above $3,400, the short-term structure is likely to continue extending upward, and market confidence will continue to strengthen; if it falls back to around $2,750, it may need to enter a consolidation phase, and operational rhythms should be more cautious.
In terms of risk control, it is essential to closely monitor several important variables: first, the on-chain movements of the Ethereum Foundation; if large sales continue frequently, it may become a short-term bearish factor; second, the Federal Reserve's policy window; if the July meeting does not release signals of interest rate cuts, it may also impose temporary pressure on the market.
Overall, while this market cycle still holds uncertainty, from a structural and capital perspective, the window for the 'altcoin season' is slowly opening. The key lies in how to properly construct the position, grasp the rhythm, and control risks. If BTC is the anchor of the era, and ETH is the key to the structure, then those altcoins about to be rediscovered are the bridge to the next wave of dividends.