Has the altcoin season already started? How much space is there for future growth?
In July 2025, after several weeks of fluctuation and consolidation in the crypto market, a decisive breakthrough finally arrived. BTC surged past $120,000, ETH rebounded strongly above $3,400, and several mainstream and sentiment-driven altcoins recorded over two-digit gains within 24 hours. The discussion of 'Has the altcoin season returned?' quickly ignited enthusiasm across the network.
However, is this market truly a comprehensive bull market restart, or yet another round of 'high-level enticing'? Which projects are genuinely worth early positioning? We attempt to clarify three things for everyone:
What is the underlying logic of this round of increase?
Which sectors/coins are most worth paying attention to in this round of market?
One, the threefold catalysts behind the market breakthrough: from 'tariff desensitization' to 'institutional building'.
The significant rises in BTC and ETH are not without foundation; the key background for this wave of explosion comes from the simultaneous warming of macro sentiment and capital structure.
1. Tariff 'desensitization' and policy expectation adjustment.
The policy pressure in this round of the market mainly comes from Trump's renewed trade war rhetoric. However, after several months of policy repetition, the market has gradually become immune to the 'tariff' issue, and a turning point in sentiment has emerged.
The panic index has continuously declined, and the crypto market is refocusing on 'liquidity' and 'policy shift'. Recently, several Federal Reserve officials released signals for rate cuts, reinforcing the market's expectations for 'autumn rate cuts', and funds have begun to pre-position in risk assets, 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 'foundation' driving the market's rise. Recently, we have observed an important signal: not only does the BTC ETF continue to maintain net capital inflow, but there are also obvious signs of capital accumulation in potential ETF targets such as ETH and SOL.
Data shows that several large institutions have indirectly built positions in ETH spot through market makers, and market expectations are that '**the ETH spot ETF will be officially launched no later than Q3 2025**.' At the same time, the Solana ecosystem's ETF channel has also been opened, promoting SOL to become one of the strongest mainstream altcoins.
3. The market's short position structure is weak, and the 'short squeeze' scenario is beginning to emerge.
According to Coinglass and CoinGecko data, the total open interest (OI) across the network has climbed to a historical high of $172 billion, with BTC at $83 billion, ETH at $40 billion, and the altcoin portion exceeding $50 billion, accounting for nearly one-third. More critically, the OI of multiple small and medium-cap coins has exceeded their circulating market value, resulting in a naked short accumulation structure—once collective stop-loss liquidations are triggered, it will lead to a violent short squeeze, becoming the ignition point for the 'altcoin season.'
Two, ETH has become a barometer again; has the altcoin season really arrived?
As the barometer of the past few rounds of 'altcoin season', ETH has once again played a decisive role this time.
ETH once broke through the $3,400 mark, and since the beginning of the year, its rebound has outperformed BTC and SOL, achieving a double reversal of 'catching up' and 'expectation repair'. The Ethereum Foundation, previously subject to doubts, has gradually rebuilt market confidence through internal governance reforms, expanding the Layer 2 ecosystem, and improving on-chain activity.
The five major logics behind ETH's rise:
Regulatory easing: ETH is breaking away from the 'security' label, and calls for ETF approval are rising.
Institutional building: Several traditional financial institutions have entered ETH spot;
On-chain data recovery: L2 activity is warming up, with active addresses and gas fees both rising.
Foundation reform: Governance decentralization, reduced selling pressure.
The technical route is clear: Danksharding, Verkle trees, and other upgrade paths are steadily advancing.
The 'ignition point' of the altcoin season: the structural confirmation after ETH breaks $3,400.
If BTC's rise brings 'directional signals', ETH stabilizing at $3,400 serves as the permit for capital rotation in the altcoin sector.
In the past 48 hours, several altcoins including SUI, ARB, PEPE, and PENGU have recorded increases of over 10%-25%, with the MEME sector and new public chain ecology being particularly active, and a structural market has emerged.
Three, sector rotation and coin recommendations: from mainstream assets to hot sentiments.
1. Mainstream mainline (medium to long-term allocation suggestions).
ETH: If it can stabilize above $3,400, it will drive the overall rotation of altcoins; it is recommended to hold it significantly.
SOL: With the ETF landing, capital inflow, and complete technical indicators, it is the strongest consensus among altcoins.
ARB: Leader of Layer 2, with a significant recovery in TVL, recently becoming representative of capital 'low valuation'.
SUI: A potential high-growth public chain, with steadily rising on-chain ecology and DApp developer activity.
ONDO (Leader of the RWA sector): The biggest beneficiary of the stablecoin + treasury narrative, with heavy institutional holdings and a strong trend.
2. Emotional assets (suitable for swing trading strategies).
PEPE: An established meme coin with explosive potential under a short squeeze structure.
PENGU: An emotion-driven project with extremely high social heat, suitable for quick in-and-out.
HYPE: Anticipatory assets, the narrative has not yet fully materialized, leaving room for upward movement.
Meme series such as FLOKI and WIF: It is recommended to pay attention to capital movements and traffic data from Tiktok/social platforms.
Four, operational recommendations and strategy framework.
For the current market's phased trends, we recommend adopting a 'three-stage' strategic thinking, namely 'mainstream first → altcoin rotation → sentiment rebound'. From the perspective of capital flow and market structure, we are currently at the starting point of the second stage: mainstream coins are warming market sentiment, and funds are beginning to spread to quality altcoins.
In terms of allocation, we still recommend that investors prioritize stability, with the combination of BTC and ETH not accounting for less than 60% of total assets. If ETH can maintain above the $3,400 mark after breaking through, it is highly likely to continue being the market leader, while BTC, as a safe haven for large funds and a valuation anchor, remains the preferred foundational allocation.
For investors who want to participate in altcoin rotation, the remaining part of the position can be diversified into projects like SOL, ARB, SUI, ONDO, which have clear fundamentals and signals of capital involvement. These targets are at the forefront of the current rotation, with more certainty and mid-term potential.
In terms of short-term strategies, we recommend focusing on those emotional assets with short squeeze structures, high social heat, and strong trading activity, such as PEPE, PENGU, HYPE, etc. However, it should be emphasized that these types of targets carry higher risks and are suitable for quick in-and-out, disciplined operational methods, especially to set good take-profit and stop-loss points.
For market judgment, we suggest focusing on the key performance of ETH. If ETH can effectively maintain above $3,400, the short-term structure is expected to continue extending upwards, and market confidence will continue to strengthen; if it falls back to around $2,750, it may need to enter a consolidation and power-up phase, and operational rhythm should be more cautious.
In terms of risk control, it is necessary to closely monitor several important variables: first, the on-chain movements of the Ethereum Foundation; if frequent large-scale sell-offs continue, it could become a short-term bearish factor; second, the Federal Reserve's policy window; if the July interest rate meeting does not release signals for rate cuts, it may also exert temporary pressure on the market.
Overall, although this round of market still has uncertainties, from the structural and capital perspective, the window for 'altcoin season' is slowly opening. The key lies in how to build a good position structure, 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 that are about to be rediscovered are the bridge to the next wave of dividends.
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