Author: kkk, Rhythm
On August 12, Ethereum broke through $4700, reaching a four-year high, and @CryptoHayes, who took profits early last week, also re-bought Ethereum on August 9; Bitcoin also set a new high, with the total market capitalization of cryptocurrencies soaring to $4.2 trillion, completely igniting market sentiment.
The traditional market is also booming. The S&P 500 and Nasdaq 100 have both refreshed historical records, with global liquidity accelerating towards risk assets; the US dollar index (DXY) has fallen below 98, further opening the floodgates for capital to flow into the stock and crypto markets. This macro environment not only solidifies the upward trend but also boosts investor confidence in high-risk assets.
At the same time, the market is almost certain that the Federal Reserve will cut interest rates at the meeting on September 17, with a probability close to 100%, lowering the benchmark interest rate to the range of 4.00%-4.25%. This expectation provides additional fuel for a market that relies on high liquidity—especially cryptocurrencies. Now, the wealth effect of the 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 trading this week.
@b66ny
BTC.D has recently shown a clear downward trend, falling from previous highs to about 57.7%. Combined with the trend of ETH.D, I believe this is a typical signal of capital rotation: market funds are starting to withdraw from relatively stable assets and pursue higher-risk, higher-potential return targets. Historically, the continued decline of BTC.D has often been one of the necessary conditions for the startup of the altcoin season.
ETH.D not only represents the strength of Ethereum itself but is also 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 the rapid rise in ETH prices, ETH/BTC has increased by over 4% in 24 hours, indicating a clear trend of funds flowing from Bitcoin to Ethereum.
This trend is a classic script of capital rotation: In the first stage, 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 injecting more liquidity into the altcoin market.
Next, it is worth paying attention to OTHERS.D (the market capitalization share of mid-to-small altcoins excluding top coins like BTC and ETH). Currently, OTHERS.D is still in a long-term bottom consolidation, without explosive growth similar to ETH.D, indicating that fund enthusiasm is still concentrated on a few top assets like ETH. Although SOL has also shown a significant rise today, the signs of capital rotation are becoming clearer, but it has not yet fully spread to high-risk, small-cap speculative sectors.
Looking at the three major indicators comprehensively, the market is likely in the early stages of rotation:
Occurred: BTC.D down, funds overflow.
Currently happening: ETH.D rises, funds concentrate into ETH.
Not yet occurred: OTHERS.D rises, capital spreads to small-cap altcoins.
@im_BrokeDoomer
From the comparison of the market capitalization of altcoins and Bitcoin from 2017 to the present, we are currently at a key support position at the lower edge of the channel. This position has historically been a sensitive area for capital entry, often accompanied by a warming of market sentiment and accelerated rotation. If this support is confirmed, the altcoin sector is expected to experience a collective explosion, marking the official start of a new round of altcoin season.
The startup process of the altcoin season is generally as follows: Bitcoin (BTC) starts the market → Ethereum (ETH) follows the rise → BTC gains strength again → ETH breaks historical highs (ATH) → Large-cap altcoins rise → BTC sets new highs → ETH and large-cap altcoins reach new highs together → Mid-cap altcoins take off → Small-cap altcoins explode comprehensively.
We are currently in the third stage, with ETH and large-cap altcoins hitting new highs, and further explosions from other altcoins can be expected.
@ZssBecker
In the previous bull market in 2020, most altcoin narratives did not explode at the beginning but waited until ETH prices broke historical highs and rose 3 times before fully launching. At that time, funds surged into new narratives—such as the gaming sector—pushing related tokens to soar by 10, 20, or even 50 times, with Sandbox once skyrocketing by 80 times, and even the most hollow and marginal game projects could achieve dozens of times increase. This phenomenon only truly occurred in the later stages of the bull market, but once it started, it became a concentrated period of wealth effect explosion.
I believe this scenario will repeat in this round of market. Currently, we are still in the first phase of the altcoin season—dominated by BTC and ETH. We need to wait for ETH to break above $5000 and mainstream altcoins to achieve a 2-3 times increase before the market funds will frantically seek the next narrative. The most likely successors will be AI, RWA, and gaming, as these three areas have been efficiently penetrated and profited from by the crypto industry, possessing strong narratives and high potential returns.
The launch of the last gaming narrative allowed countless people to turn a few thousand dollars into millions of dollars in assets; this time, the market's capital scale is larger and the risk appetite is higher. Once it starts, the driving force of funds will be even stronger. For investors, the key is not to anxiously chase 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 market structure will help one realize 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, and funds were relatively concentrated, with almost all top sectors experiencing a rise; now there are already over a million coins on the market, competition is extremely dispersed, and funds cannot cover all targets.
This means that this round of the market is more likely to see a 'local altcoin season'—funds will concentrate in a few sectors or individual tokens with strong narratives, strong communities, and strong liquidity, creating localized frenzies, 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 current optimism lies more with the AI track.
@joao_wedson
The real altcoin season is still far from starting. The flow path of smart capital is usually: first from BTC to ETH, then into top large-cap coins, and finally spreading to mid-to-small-cap tokens. The current market has just entered the first half, and the real 'altcoin frenzy' is still on the way, perhaps continuing until November. In other words, the rise we see now is just an 'appetizer'; the real 'main course' has yet to be served.
