The cryptocurrency market has recently shown strong growth, with Ethereum (ETH) breaking $4,535, reaching a four-year high, and Bitcoin (BTC) reported at $117,683, with the total crypto market cap exceeding $4 trillion. The S&P 500 and Nasdaq 100 have hit historical records, the dollar index (DXY) has fallen below 98, and global liquidity is rapidly flowing into risk assets. The likelihood of a Federal Reserve interest rate cut on September 17 is very high, and market sentiment is generally optimistic.
However, the wealth effect of the altcoin season has not yet fully manifested, and the current market is still in the early stage of capital rotation, with a certain distance remaining before mid and small-cap altcoins collectively explode. The following data and trend analysis will evaluate the current phase and future outlook.
The current market belongs to the early stage of capital rotation.
The start of the altcoin season usually follows the path of funds transferring from blue-chip to high-risk assets, and the market is currently in this initial stage of rotation. Specific manifestations include:
- First stage (BTC dominance period): Basically completed. BTC's dominance (BTC.D) has fallen from its previous high to about 58.78%, indicating that funds have begun to overflow.
- Second stage (ETH taking the lead): Ongoing. ETH's dominance (ETH.D) has risen to 13.62%, and ETH/BTC has increased by over 4% in 24 hours, with funds clearly flowing into the ETH ecosystem.
- Third stage (large-cap altcoin activation period): Initially visible. Large-cap altcoins like SOL have shown an increase, but the overall sector's rise is limited, with funds still concentrated in leading assets.
- Not yet started phase (explosion period of mid and small-cap altcoins): OTHERS.D (mid and small-cap altcoins market cap ratio) is still at the bottom and has been flat at about 7.69%, showing no explosive growth.
The current market structure shows that BTC accounts for about 58% of the market cap, ETH accounts for 13-14%, and the total market cap exceeds $4 trillion, but the proportion of mid and small-cap altcoins is sluggish.
In the last bull market, ETH surged 3 times before triggering a narrative explosion, with tokens like Sandbox increasing by dozens of times. This round is expected to require ETH to break through $5,000 and drive mainstream altcoins to rise 2-3 times before funds will flow into new narratives such as AI, RWA, or gaming.
Benefiting from the macro positive outlook of the Federal Reserve's interest rate cut expectations and liquidity injections, institutional funds are accumulating in BTC and ETH, laying the foundation for an altcoin season, which has boosted market confidence. However, the market remains decentralized, with over a million cryptocurrencies competing fiercely. Currently, funds may only be forming a 'local altcoin season', concentrated in strong narrative sectors, while mid and small-cap altcoins are still in the layout phase.
In summary,
It will take time to reach a comprehensive altcoin season; the market is currently in the early stage of ETH taking the lead. It is recommended to pay attention to the strong narrative altcoin sector and layout in advance to seize opportunities. At the same time, remain rational and avoid blindly chasing highs. For example, for ETH, there should at least be one or two rounds of pullbacks, with new lows not breaking old highs; this will ease the fear of high prices in the market, and retail funds will continue to drive up prices after entering.
