Many cryptocurrency traders are looking forward to a 'new altcoin season', expecting altcoins like Ethereum, Solana, and DeFi tokens to experience massive growth. However, the latest market data and technical signals suggest that it is too early to expect that.
Bitcoin's dominance is still high - a bad sign for altcoins.
On the three-day chart, Bitcoin's dominance (the market cap ratio of Bitcoin compared to the entire cryptocurrency market) remains solid above the important support area of 60.5% - 61%.
This is important because when Bitcoin's dominance is high or continues to rise, cash flows tend to stay in Bitcoin rather than flow into altcoins. Conversely, for altcoins to truly thrive, dominance must sharply and sustainably decrease without this support area.
Despite the slight drop that occurred recently which helped altcoins recover slightly, it does not constitute a confirmation signal for a real altcoin season. If dominance rebounds from its current range, selling pressure on altcoins will be even stronger.
The Ethereum exchange-traded fund recorded its worst withdrawal day in history.
Also concerning is the activity of Ethereum exchange-traded funds on Wall Street. On Monday alone, over $465 million was withdrawn from spot Ethereum ETFs, the largest amount since these products were launched.
It's worth noting that BlackRock's Ethereum ETF alone saw outflows of $375 million, a record outflow in a single day that clearly reflects institutional investors' concerns and lack of confidence in ETH's short-term outlook.
Ethereum faces strong resistance and shows bearish signals.
Technically, Ethereum (ETH) is still struggling, facing continuous rejection at the strong resistance area between $3900 and $4100. Each time the price approaches this area, selling pressure increases, leading to a reversal in Ethereum's price and a decline.
Additionally, a bearish divergence has appeared on Ethereum's daily chart, which typically indicates a potential correction. The last time this pattern appeared, Ethereum sharply declined in the following weeks. If this pattern repeats, Ethereum is likely to face more selling pressure in the coming period.
Conclude
While many traders expect a new season for altcoins, current data does not support that.
Bitcoin's dominance remains high → The flow of funds is not ready to leave Bitcoin for altcoins.
The Ethereum ETF sees record outflows → Weak sentiment in the short term.
ETH faces strong resistance + bearish signal → The risk of a correction remains high.
Investors need to be patient and closely monitor market indicators. The real altcoin season only begins when Bitcoin's dominance sustainably declines and confidence returns to altcoins, especially Ethereum.