"Bitcoin has surpassed $120,000!" On July 14, this news spread like wildfire in the crypto community.
However, what excites investors even more is — a collective celebration among altcoins! DOGE surged by 30% in a single day, SOL's market cap is aiming for Ethereum, and even the "Trump Memecoin" has entered the top ten... this scene is remarkably reminiscent of the "altcoin season" prelude of 2021.
Is this the start of a real bull market, or just short-term speculation? But don’t rush to go all in! Today, let’s dissect the "causes and consequences" of this "altcoin season" thoroughly.
I. Macro environment: Easing + regulatory relaxation, the "spring" soil for altcoins is ready! 🌱
The underlying logic of this round of market needs to consider the "old three items" in the crypto circle — global monetary policy, regulatory attitude, and institutional actions; these three are the "anchors" that determine the market direction!
1. The Federal Reserve's "dovish voice" has sounded, money is coming! 💦
The July Federal Reserve meeting minutes can be called a "dovish nuclear bomb" 💣: Hawkish heavyweight Waller directly proposed a rate cut in July, and conservatives also discussed a "50 basis point cut within the year". The market is crazily betting on a 65% probability of a rate cut in September!
The crypto circle is highly dependent on "liquidity" — when the dollar is loosened, hot money rushes in like sharks smelling blood, diving into Bitcoin and altcoins, which are "high-elastic targets"! Coupled with the easing of global trade frictions and cooling geopolitical risks, funds that were originally huddled in gold are now lining up to "move to the crypto circle".
2. Regulatory relaxation: From "iron fist" to "embrace", institutions are willing to jump on board! 🤝
The recent operations of the U.S. SEC have been impressive — the new chair quickly pushed for the stablecoin bill (GENIUS Act), giving a green light for Bitcoin as "strategic reserves"; the White House released a digital asset blueprint, clearly incorporating crypto into the "national financial system"!
On July 16, Bitcoin spot ETFs had a net inflow of $799.5 million, with assets reaching $14.884 billion, marking ten consecutive days of net inflow; Ethereum spot ETFs had a net inflow of $716.63 million, with assets reaching $13.25 billion, marking nine consecutive days of net inflow. Although Ethereum's spot price increase has lagged behind Bitcoin's since 2025, institutional funds are accelerating their entry through ETFs. As ETH returns above $3,000, the water-storing effect of ETFs is becoming more apparent, further boosting the popularity of Ethereum and the altcoin market.
The most intuitive thing is — publicly listed companies have started hoarding altcoins! Nasdaq company SharpLink Gaming has acquired 296,000 ETH (worth nearly $1 billion), directly surpassing the Ethereum Foundation as the "world's largest ETH holder"; there's also the "Solana version of MicroStrategy" DeFi Development Corp, holding 640,000 SOL ($98 million) for long-term holding.
3. Institutional funds: from "only favoring BTC" to "altcoins being picked up"! 💼
Previously, institutions bought crypto assets with 90% of the money going into BTC and ETH, like "only choosing the biggest watermelon"; now the trend has shifted — VanEck and Bitwise have submitted applications for Solana spot ETFs; Grayscale has launched a "large altcoin gift package" trust; ProShares is launching 2x leveraged futures ETFs for SOL and XRP, ringing the bell on the NYSE!
Even "traditional players" can’t sit still: MicroStrategy's founder says "the altcoin season may come faster than expected", and his company has started researching DeFi protocols like Aave and Lido.
II. Funding leaks: BTC dominance is decreasing, signaling that altcoins are "sucking in capital"! 🚨
Having said so much, the key is how the money moves!
1. BTC dominance: 62.88% "high-level loosening", are altcoins about to grab funds? 💪
BTC dominance (the market cap of BTC as a proportion of the total market) is a "golden thermometer" for judging the "altcoin season"! Historically, before a major altcoin explosion, BTC dominance tends to slide from over 70% to 50%-60%.
As of July 14, Bitcoin has just surged to a new high of $120,000, but BTC dominance has dropped from 64% at the beginning of July to 62.88% — although still high, it is a new low in three months! New funds entering the market are no longer just eyeing BTC, but are starting to "share the cake" with altcoins.
2. ETH/BTC ratio: the "key breakthrough point" at 0.029, are altcoins about to follow suit? 📈
The "price ratio" of ETH and BTC (ETH/BTC) is a "leading signal"! Historically, when this ratio breaks through 0.03, altcoins will enter "party mode" — funds flow from BTC to ETH, then to small-cap altcoins, like a "relay race".
Currently, ETH/BTC has rebounded from 0.017 at the beginning of the year (ETH was cheap) to 0.029, just one step away from 0.03! More importantly, Ethereum ETFs have seen a net inflow of $716 million for nine consecutive days, with total assets reaching $13.2 billion — ETH has already started to "stand tall", and how far can altcoins' "reinforcements" be?
3. Altcoin Season Index: 39 points in the "warming period", 40% of altcoins outperform BTC! 🎯
The CoinMarketCap altcoin season index (Altcoin Season Index) exceeding 75 points indicates a "party night", while below 25 points indicates a "BTC solo show"; currently at 39 points, it is in the "warming period" — the altcoin season index has recently started to rise again: it had previously dipped to around 15 in mid-June, but began to rebound quickly from July, having risen to 39 this week. 40% of mainstream altcoins (in the top 100) have outperformed BTC!
According to CoinGecko statistics, the total transaction volume in the last 24 hours reached $243.7 billion, with BTC accounting for 21%, ETH for 17.5%, and other tokens collectively exceeding 61.5%, setting a recent high.
This phenomenon mainly stems from:
Valuation repair demand: After continuous adjustments, mainstream altcoins have entered a value gap.
Narrative-driven effect: Ethereum's strong rebound has driven a resurgence in market risk appetite.
Characteristics of capital rotation:
Non-universal bullish market, showing clear thematic selectivity.
Funds are concentrating on projects with new narratives.
Institutional investors are beginning to position themselves in potential blue-chip targets.
The current market is transitioning from a BTC solo performance to a rotation of altcoins, but investors should note: this round of market is more likely to present structural opportunities rather than a comprehensive bull market. It is recommended to focus on quality projects with actual ecosystem support and clear institutional holdings.
III. On-chain data: activity has soared, and the altcoin "ecosystem" is alive! ⚡
Looking at prices alone is not enough; on-chain data is the "true strength" — more users, more transactions, and more DApps make for a "long bull" foundation for altcoins!
1. On-chain activity: Ethereum and Solana are leading, users are bottom fishing! 📱
Ethereum has recently "breathed a sigh of relief" — Gas fee revenue in June returned to the top among public chains, with daily active ERC-20 addresses rising to 510,000 (a year-on-year surge of 50%)! The average daily active wallets (dUAW) for DeFi protocols surged to 25 million, an 8% increase month-on-month; NFT transaction volumes rose by 40% — users are not only buying coins but also "using the chain", akin to "shopping in a mall"!
Solana is even more impressive: 29.7 billion transactions in June, with an average of 1.71 million active addresses per day, directly crushing Ethereum and Bitcoin! On-chain Dex trading volume tripled, and Memecoin trading accounted for over 40% — this level of enthusiasm resembles the "DeFi summer" of 2021, akin to "setting off fireworks during the New Year"!
2. DeFi TVL: A "fund pool" of $132 billion, altcoins are "creating blood"! 💧
The total locked value (TVL) in DeFi is a "barometer of ecosystem health" — from $89 billion at the beginning of the year to $132 billion in June — a 48% increase in six months, akin to "inflating a balloon"!
The top protocol Aave's TVL increased by 20%, and Lido (the staking leader) has its locked value stable at over 10 billion; the Base layer 2 chain saw 292 million transactions in June, with an average of 1.71 million active addresses per day — this is not just an "expansion chain"; it is clearly a "new public chain dark horse"!
The most surprising thing is the innovative projects: Aptos (APT) has risen to $5.9, with community activities trending; Pendle (PENDLE) is launching V2 to connect with traditional finance — DeFi is no longer just "old projects making money", new gameplay is "creating blood"!
IV. Market sentiment: FOMO is coming, but "mass madness" has not yet arrived! 😜
Finally, let’s talk about the most esoteric "market sentiment" — bull markets often die from "greed" and start from "hesitation"!
1. Fear and Greed Index: 70 points in the "greed zone", retail investors are still observing! 🤔
The Crypto Fear & Greed Index surged to 70 points (over 80 points indicates "extreme greed"), indicating that institutions are "snapping up", but retail investors have not fully caught up — Google Trends show that Bitcoin search volume is far from the peaks of 2017 and 2021; while altcoin search volume has risen, it is concentrated on "DOGE" and "SOL", akin to "chasing old internet celebrities".
2. Social platforms: Discussions on X have increased, but no "blockbuster topic" has emerged yet! 🗣️
Currently, the reading volume of the topic # AltcoinSeason on X has increased by 50% weekly, but there is no phenomenon-level event that has gone "viral across the whole network" — unlike in 2021 with "Dogecoin" or 2023 with "Memecoin", where a meme ignited the entire sector, it's more like "a party in pre-warm-up".
Summary: Large funds have "rushed in", while retail investors are still "hesitating" — this "discrepancy period" is precisely the "golden window" for positioning in altcoins!
V. Hot sectors review: Which altcoins are worth focusing on? 🌟
Having said all this, which altcoins should we focus on? Let’s review the current five sectors that are most worth paying attention to based on "potential + heat"!
1. Memecoins: "Emotion engines", but must choose those "with stories"! 🎭
Memecoins are always the "atmosphere group" during altcoin season — with a total market cap of $78.9 billion, average increase of 25% over the past week! The top projects are still the familiar "cats, dogs, frogs" (DOGE, SHIB, PEPE), but new Memes are also on the rise: TRUMP (Trump concept) surged 30% on election heat, PENGU ("little penguin" NFT collaboration) doubled thanks to community operations, USELESS ("useless coin") rose 50% based on "anti-consensus" narratives...
Key point ⚠️: Memecoins are highly volatile, don’t chase highs! Prioritize those "with IP support" (such as NFTs, celebrity collaborations) and "small circulating supply" (total market cap < 500 million), as they carry lower risk.
2. Emerging Layer 1: Expansion + ecosystem, opportunities for "new public chains"! 🌐
Solana (SOL) has already proven itself with "transaction volume", but there are more "dark horses": Sui (SUI) relies on "parallel processing" technology, TPS exceeds 100,000; Berachain (BERA) focuses on "Ethereum compatibility + EVM", attracting a host of DeFi protocols to migrate; Sonic (SONIC) uses "modular architecture", focusing on "low cost + high security" — if these public chains launch ecosystem incentives in Q3-Q4, they could very likely replicate Solana's "surge myth" from last year!
3. Layer 2: Ethereum's "expansion necessity", expectations for airdrops are high! 🎁
Ethereum's Layer 2 (second-layer expansion) is always a "necessity" — Arbitrum (ARB) and Optimism (OP) have recently regained popularity through "ecosystem incentives"; Base (BASE), as Coinbase's darling, had 292 million transactions in June, directly competing with Solana; zkSync (ZKS) just launched its mainnet, attracting a plethora of institutions with its "zero-knowledge proof" technology...
Key point ⚠️: The investment logic for Layer 2 is "cross-chain interoperability + airdrops" — if the project can connect multiple chains like Ethereum and Solana, or has large-scale airdrop plans recently, it is very likely to rise!
4. LSD/Restaking: The "second development" of ETH staking, steady progress! 💎
With ETH prices rebounding, the LSD (liquid staking derivatives) sector is hot again — LDO (Lido) rose by 20%, EIGEN (EigenLayer) rose by 30%, and BABY (BabyDollar), a "restaking protocol", even doubled!
The core logic is simple: ETH staking volume has surpassed 30 million (accounting for 25% of total supply), but users need "higher returns" — LSD protocols that combine "staking + lending" and "staking + liquidity mining" have increased ETH yield from 5% to 8%-10%, naturally attracting capital inflow.
5. RWA: The "on-chain revolution" of real-world assets, with stable returns! 🏦
RWA (real-world assets) have recently been snatched up by institutions — Ondo Finance has tokenized U.S. Treasury bonds, with TVL soaring to $1.4 billion; Centrifuge has put real estate and corporate loans on-chain, attracting traditional asset management giants like BlackRock; MakerDAO has even increased the proportion of RWA collateral to 20%, directly pushing MKR up by 15%!
Key point ⚠️: The advantage of RWA is "stable returns + strong compliance" — if the project has backing from well-known institutions (such as BlackRock, Fidelity) or collateral is "high-credit assets" (Treasuries, publicly traded company bonds), the safety is even higher!
VI. Conclusion and Suggestions: During the "early stage" of the altcoin season, such layouts are more stable! 🛠️
Overall, the current crypto market is indeed in the initial stage of "BTC dominance → altcoins outbreak": macro easing + regulatory friendliness + institutional entry provides a "favorable time" for altcoins; on-chain activity + DeFi TVL + warming sentiment provides "favorable conditions"; the rotation of sectors like Meme, Layer 2, and RWA provides "human factors".
However, we must stay clear-headed — BTC dominance is still at a high of 62%, and the ETH/BTC ratio has not broken through 0.03, indicating that funds are still "selectively flowing in" (only focusing on hot sectors). This suggests that the "full altcoin season" has not arrived yet; currently, it is the stage where "large-cap altcoins lead, and small-cap altcoins follow"!
Advice for investors:
✅ Lightly test the waters: Don’t go all in at once; first take a 10%-20% position to layout in hot sectors (such as Meme, Layer 2);
✅ Focus on leaders: Choose 1-2 "fundamentally strong + high liquidity" leaders in each sector (for example, in Meme choose DOGE, TRUMP; in Layer 2 choose ARB, BASE);
✅ Beware of risks: Stay away from "airdrop coins" and "shitty coins", and focus on "on-chain activity", "institutional holdings", and "ecosystem progress";
✅ Dynamic adjustment: If BTC dominance falls below 60% and ETH/BTC breaks through 0.03, then increase your position in altcoins; if market sentiment suddenly cools (for example, if the fear and greed index drops back to 50), take profits in time!
In conclusion, the opportunity during the altcoin season is "reserved for those who are prepared" — researching sectors in advance, diversifying positions, and controlling risks are essential to "earn the money within your cognitive reach" in this round of market!
✍️ DYOR, manage your risk, and may everyone sail smoothly in the crypto world! 🌊
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