Let's analyze why the rise of ETH often drives the altcoin boom.
There are mainly three aspects:
🦄Fund rotation effect
The classic pattern is that BTC rises to a high level and then goes sideways → funds begin to look for higher returns → ETH takes the lead → altcoins explode
The data shows that the total market value of altcoins has increased by $216 billion in the past two weeks, while $BTC has only increased by 16%, while $ETH has soared by 61%!
🐳Changes in market psychological behavior
Bitcoin usually attracts funds in uncertain times because investors prioritize security and value storage properties.
However, when Ethereum began to surpass Bitcoin, it showed that market participants had a stronger tolerance for risk and were increasingly optimistic about the future of blockchain technology (beyond simple value storage).
This psychological shift created excellent conditions for the peak season of altcoins. The next sentence is to seek higher-yield varieties-altcoins
🐻Ethereum's technical catalyst and network effect
Ethereum's technological development can often serve as a pioneer for broader innovation in the entire altcoin field.
For example, the introduction of Layer-2 scaling solutions will not only benefit Ethereum, but also create opportunities for a range of projects focused on bridging, optimizing, and enhancing the Layer-2 experience.
This means that improvements in the Ethereum space can benefit multiple projects. This interconnectivity means that Ethereum's success can have a multiplier effect rather than an additive effect on the entire ecosystem.
From my observation, the cycle rotation is now clearer than before.
The original rise of altcoins was often more driven by speculation (and it is still), but now the cycle of altcoins seems to be a little clearer than the connection with actual utility and adoption indicators (a good thing).
