Some investors monitor capital flows. The market is now entering the second phase of a four-phase cycle.

$ETH is outperforming $BTC in terms of returns, which means we have transitioned into the second phase of the alt season.

Phase 1 - Bitcoin dominance

Phase 2 - Ethereum surpasses Bitcoin

Phase 3 - Growth of the most capitalized altcoins

Phase 4 - Growth of smaller altcoins and meme coins, often signaling the final stage of the alt season.

Another important factor is Bitcoin dominance (BTC.D). In July, the BTC.D value fell from 65.5% to 61%. This was the largest monthly decline since November 2024. Analysts studying trends from previous cycles believe that the altcoin season will continue until BTC.D reaches the range of 48%-50%.

Each investor has their own strategy. However, historical experience shows that holding altcoins for extended periods can be risky, unlike Bitcoin, which typically rebounds better. As the market overheats, these risks only increase.$XRP