Author: kkk, BlockBeats
On August 12, Ethereum broke through $4700, setting a new four-year high. @CryptoHayes, who had previously taken profits on August 9, also bought back Ethereum; Bitcoin also reached a new high, and the total market capitalization of cryptocurrencies surged to $4.2 trillion, completely igniting market sentiment.
The traditional market is also thriving. The S&P 500 and Nasdaq 100 have both refreshed historical records, and global liquidity is accelerating towards risk assets; the dollar index (DXY) has fallen below 98, further opening the floodgates for capital to flow into the stock and crypto markets. Such a macro environment not only solidifies the upward trend but also boosts investor confidence in high-risk assets.
Meanwhile, the market is almost certain that the Federal Reserve will lower interest rates at the meeting on September 17, with a probability close to 100%, bringing the benchmark interest rate down to the 4.00%-4.25% range. This expectation provides additional fuel for the high liquidity-dependent market—especially cryptocurrencies. Now, the wealth effect of altcoin season has become a hot topic in the market, and the key is when it will fully start.
Next, Rhythm BlockBeats has organized traders' views on the upcoming market situation to provide some directional references for everyone's trading this week.
@b66ny
BTC.D has recently shown a clear downward trend, retreating from previous highs to about 57.7%. Combined with the trend of ETH.D, I believe this is a typical sign of fund rotation: market funds are beginning to withdraw from relatively stable assets to pursue higher risk and higher potential return targets. Historically, the continued decline of BTC.D has often been one of the necessary conditions for the start of altcoin season.
ETH.D not only represents the strength of Ethereum itself but is often seen as the leader of the entire altcoin market. Currently, ETH.D is performing strongly, with the dominance rate rising to 14.0%, and accompanied by a rapid rise in ETH's price, ETH/BTC has increased by over 4% within 24 hours, showing that funds are clearly flowing from Bitcoin to Ethereum.
This trend is a classic script of fund rotation: in the first phase, BTC stagnates or even declines, and funds begin to flow into ETH; the rise of ETH not only boosts market confidence but also creates conditions for more liquidity to enter the altcoin market.
Next, worth paying attention to is OTHERS.D (the market capitalization proportion of mid-sized altcoins excluding leading coins like BTC and ETH). Currently, OTHERS.D is still in a long-term bottom consolidation and has not shown explosive growth like ETH.D, which means that the heat of funds is still concentrated on a few leading assets like ETH. Although SOL also saw a significant rise today, making the signs of fund rotation more apparent, it has not yet fully spread to high-risk, small-cap speculative sectors.
Comprehensive analysis of three major indicators suggests that the market is likely in the early stages of rotation:
Has occurred: BTC.D is declining, funds are overflowing.
Currently happening: ETH.D is rising, funds are concentrating into ETH.
Not yet occurred: OTHERS.D rises, funds spread to small-cap altcoins.
@im_BrokeDoomer
From the comparison of the market capitalization of altcoins with Bitcoin since 2017, we are currently at a critical support position near the lower edge of the channel. This position has historically been a sensitive range for fund entry, often accompanied by a warming of market sentiment and accelerated rotation. If this support is confirmed, the altcoin sector is expected to welcome a collective explosion, marking the official start of a new round of altcoin season.
The startup process of altcoin season generally follows this sequence: Bitcoin (BTC) starts the market → Ethereum (ETH) follows with an increase → BTC exerts force again → ETH breaks the historical high (ATH) → Large-cap altcoins rise → BTC sets a new high → ETH and large-cap altcoins hit new highs together → Mid-cap altcoins take off → Small-cap altcoins fully explode.
Currently, we are in the third phase, with ETH and large-cap altcoins hitting new highs, and the subsequent explosion of other altcoins can be anticipated.
@ZssBecker
In the previous bull market of 2020, the narratives of most altcoins did not explode at the beginning but only fully started after ETH's price broke its historical high and increased threefold. At that time, funds poured in like a flood into new narratives—such as the gaming sector—driving related tokens to surge by 10, 20, or even 50 times, with Sandbox even soaring 80 times, and even the most hollow and marginal gaming projects could achieve dozens of times increases. This phenomenon did not truly occur until the later stages of the bull market, but once it started, it became a concentrated explosion period of wealth effects.
I believe this scene will be replayed in this round of market. Currently, we are still in the first phase of altcoin season—BTC and ETH's dominance period. We need to wait for ETH to break above $5000 and mainstream altcoins to achieve a 2-3x increase before market funds will crazily look for the next narrative. The most likely contenders will be AI, RWA, and gaming, as these three areas have been efficiently penetrated by the crypto industry and realized profits, possessing strong narratives and high potential returns.
The launch of the game narrative in the previous round turned countless people’s thousands of dollars in capital into millions in assets; this time, the scale of market funds is larger, and risk appetite is higher. Once it starts, the driving force of funds will only be more intense. For investors, the key is not to chase anxiously now, but to patiently wait and lay out in advance. When the signal for narrative switching appears, the climax of the altcoin season will truly arrive.
@lanhubiji
Understanding the market structure will make it clear that the altcoin season will definitely come, but its form may be completely different from the past two rounds. Previously, the number of altcoins was limited, funds were relatively concentrated, and almost all leading sectors would experience a general rise; now there are over a million coins in the market, competition is extremely decentralized, and funds cannot cover all targets.
This means that what is more likely to occur in this round of market is a 'local altcoin season'—funds will concentrate in a few sectors or individual tokens with strong narratives, strong communities, and strong liquidity, forming local carnivals, while most coins will still be ignored by the market. For investors, opportunities still exist, but the probability of selecting the right targets is much lower than in the past, and the current outlook is more optimistic for the AI sector.
@joao_wedson
The real altcoin season is far from starting. The flow path of smart money is usually: first from BTC to ETH, then into leading large-cap coins, and finally spreading to mid and small-cap tokens. The current market is just entering the first half; the real 'altcoin carnival' is still on the way, and may continue all the way to November. In other words, the rise we see now is just the 'appetizer', and the real 'main course' has yet to be served.
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