The market's barometer is turning quickly. Bitcoin's dominance has dropped from 71% to 58%, Ethereum has outperformed the market for three consecutive weeks, the Solana ecosystem is fully recovering, and various signs point to the same conclusion: the altcoin season is about to arrive.
The first signal is the change in capital flows. According to Glassnode data, over 8 billion USD has flowed out of Bitcoin in the past two weeks, while 12 billion USD has flowed into Ethereum and other altcoins. This kind of capital rotation typically occurs in the later stages of a bull market when Bitcoin's price increase slows down, and investors begin to look for the next breakout point. Historical experience shows that once this rotation starts, it often lasts for 2-3 months, during which the gains of altcoins will far exceed those of Bitcoin.
The second signal comes from on-chain activity. The number of daily active addresses on Ethereum has exceeded 800,000, setting a new high for the year; Solana's daily transaction count has surpassed 60 million, ten times that of the same period last year; even Cardano, which was considered 'dead,' has seen its DeFi locked value quietly grow. When the public chain ecosystem becomes active, it often heralds the start of a new cycle of innovation.
The third signal is the explosion of new projects. New projects like Hyperliquid, Ethena, and Celestia have seen their market capitalizations exceed 1 billion USD in a short period, showing the market's thirst for innovation. In particular, the combination of AI and crypto is becoming the new narrative thread. The performance of AI concept coins such as Worldcoin, Render, and Akash reminds one of the madness surrounding the metaverse concept in 2021.
The fourth signal is the movement of whales. On-chain data shows that the number of addresses holding more than 1000 ETH has reached an all-time high, and these whales are also increasing their holdings of blue-chip DeFi tokens such as LINK, UNI, and AAVE. When smart money starts to position itself, it is usually a wise choice for retail investors to follow.
The final signal is the shift in market sentiment. The Fear and Greed Index has risen from 42 a month ago to 76 now, and the frequency of Google searches for 'altcoin season' has increased by 300%. Discussions about altcoins on Twitter have surpassed those about Bitcoin. When market sentiment shifts from fear to greed, it is the best time for altcoins to shine.
In terms of investment strategy, it is recommended to adopt a 'core + satellite' allocation. The core position should be allocated to leading assets like Ethereum, accounting for 50-60%; satellite positions can include leading projects in various sectors, such as ARB and OP in Layer 2, AAVE and UNI in DeFi, and WLD and RNDR in AI concepts. Remember, altcoin seasons come quickly and leave just as fast, setting profit-taking targets is more important than striving for perfection.
