Ethereum leads the rally—Is "Altcoin Season" coming back?
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Ethereum leads the rally—Is "Altcoin Season" coming back?
What do analysts think?
Navigating Web3 tides with focused insightsAuthor: Editor Jr., BlockTempo
Ethereum (ETH) has recently shown stronger upward momentum than Bitcoin. This morning on May 11, following Trump's announcement of major progress in trade talks with China, ETH briefly surged past $2,600, reigniting short-term market optimism. Meanwhile, the Altseason Index tracked by CMC has recently bottomed out and rebounded above 40, hitting a nearly 90-day high, sparking debates over whether an "Altcoin Season" is about to begin.
Divided Analyst Views
Some market observers remain positive on altcoins' outlook. Analyst Mister Crypto predicts that the market could see life-changing moves in the next three to six months, with daily 40% returns from altcoins potentially becoming the norm.
Technical trader Moustache also noted that after repeated accumulation phases, altcoins often experience explosive growth. He believes the current market structure resembles those of 2016 and 2020, declaring that "the 2025 altcoin season has officially begun."
Cautious Views: Market Enthusiasm Amid Challenges
However, not all analysts are optimistic. While analyst 2Lambroz acknowledges the potential arrival of altcoin season, he points out that although people want to chase rallies, there's a lack of belief in strong narratives. He observes that unlike in 2021, there hasn't been a large influx of retail investors, and traders are rotating capital faster without long-term holding incentives.
Commentator Rekt Fencer questions the prevailing optimism, noting that most altcoins have already dropped 90% since last December, and the recent roughly 10% rebound may be overinterpreted. He sarcastically asks, "Is this the altcoin season we've been waiting for?" He believes Bitcoin’s dominance remains above key thresholds like 54%, and institutional preference for Bitcoin may continue influencing capital flows. This market cycle may be more fragmented, with significant performance differences across various altcoin sectors.
Key Indicators and Macro Variables
Beyond technical analysis, the future direction of the altcoin market is influenced by multiple key factors. First, Bitcoin’s price and its market dominance are crucial. A rising Bitcoin price boosts overall market sentiment, but shifts in its dominance remain key to determining an altcoin season. Second, overall market sentiment and risk appetite are also important. Positive global macroeconomic and geopolitical developments—such as progress in U.S.-China trade negotiations and de-escalation of India-Pakistan tensions—could drive capital into risk assets including cryptocurrencies and meme coins.
Hank Huang, CEO of Kronos Research, said the crypto market is rebounding amid a wave of global optimism, with Ethereum’s strong recovery driving the altcoin market. However, whether capital can effectively rotate from Bitcoin to altcoins and the level of retail participation remain key points to watch.
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