The market has clearly gone through a strong structural shift, and the effects are starting to show.
In past risk-off moves, capital usually rotated into Ethereum when Bitcoin ran into resistance, since altcoins still offered better risk-reward setups.
Recent whale activity with about $92 million in ETH accumulation suggests that a similar setup might be forming again. But with the ETH/BTC ratio down nearly 7% this week, ETH is still lagging BTC, which makes the idea of a broad altcoin rally look a bit stretched for now.
That said, capital isn’t rotating in a linear way this cycle. Bitcoin dominance is stalling near the 60% resistance zone, with two weeks of steady outflows.
Even with ETH lagging, it’s pretty clear that money is rotating “selectively” into certain altcoins, showing this structural shift is already unfolding in real time.
Notably, this momentum is also showing up in on-chain data.
According to BlockchainCenter data, the Altcoin Season Index has jumped nearly 70% over the same period. This lines up with AMBCrypto’s view that capital has been flowing into select altcoins, especially since BTC broke below $80k during the late May move.
Fast forward to now, and the broader market is leaning into a more intense risk-off setup. Amid this volatility, BTC.D is running into resistance, while capital keeps rotating into select altcoins.
That opens up the possibility that, in this cycle, the market bottom could actually be led by altcoins rather than Bitcoin [BTC].
Early altcoin signals emerge as Bitcoin dominance pulls back
The market is starting to look a lot like the 2017 cycle again.
From a technical view, things are clearly bearish. Bitcoin is down nearly 20%, while the S&P 500 dropped 2.6%, mainly driven by weakness across equities.
Altcoins are still under pressure, with TOTAL3 (altcoin market cap excluding Ethereum) down about $520 billion, now back near levels last seen in November 2024.
This weakness is also showing up in market data. As the chart below shows, on Binance, nearly 83% of altcoins are trading below their 200-day moving average (200-DMA), one of the weakest readings of this cycle.
This means most altcoins are failing to reclaim their long-term trend, and sustained selling pressure is still dominating across the board.
However, some analysts expect this setup to resemble the 2017 cycle, where prolonged weakness eventually marked a major bottom.
When you combine this with the broader macro backdrop, risk sentiment, equity weakness, and liquidity-driven swings, and the ongoing capital rotation between Bitcoin and the wider altcoin market, it starts to look like a potential inflection zone forming for the next phase of the cycle.
Hence, the idea that this cycle’s bottom could be led by altcoins can’t be ruled out.