The cryptocurrency market has seen a long-awaited strong rebound during this period, especially Ethereum and its ecological tokens, meme coins and AI Agent tokens, which have seen "astonishing" increases. The price of ETH rose from $1,800 to $2,600 in just four trading days, significantly surpassing Bitcoin, and BTC also hit $106,000, just one step away from its all-time high.
The rise of Ethereum has sparked heated discussions in the market about the start of the "Altcoin Season". The CMC Altcoin Seasonal Index has re-emerged above 40 points for the first time, reaching a three-month high and attracting widespread attention from the market.
So, what factors have driven this round of Ethereum and altcoins' rise? Can the current market enthusiasm continue? How should we view subsequent investment opportunities and risks? StarEx Exchange analysts talk about their current views.
StarEx Exchange analysts believe that trade easing, risk appetite recovery, and increased risk appetite brought about by geopolitical easing are one of the main reasons for the current market. The conclusion of the US-UK trade agreement has become a catalyst for the upward movement of risk assets in the market. Before the US-China negotiation agreement in Switzerland was reached, the market expected some progress. Trump publicly stated that if progress is made, he will consider reducing tariffs, which has strengthened investors' expectations for trade easing.
The long-suppressed Ethereum has led the market in this round of rebound. There are many factors behind this: Bitcoin's dominance is fluctuating at a high level (around 54%), suggesting that the market is waiting for funds to rotate from BTC to ETH and other altcoins; Deribit was acquired by Coinbase. Deribit is the world's largest options platform, and its Ethereum options are extremely active. The acquisition has strengthened the market's confidence in the liquidity and price discovery mechanism of ETH derivatives; ETH market structure has improved: on-chain data shows that the inventory of Ethereum on exchanges continues to decrease, and the proportion of long-term holders has increased, reflecting the weakening of supply-side pressure;
Analysts at StarEx Exchange believe that this round of surge in Ethereum and altcoins is more of a retaliatory rebound. Due to the large decline in the previous period and the large number of short positions, the violent rise when the external environment warmed up wiped out the short positions.
With the rise of altcoins this time, the CMC Altcoin Seasonal Index broke through 40, reaching a 90-day high; fund rotation began to appear, and some high-market-cap altcoins (such as SOL, AVAX, ARB, LINK) led the gains; the number of active addresses and transactions on the chain increased, indicating an increase in user participation.
However, analysts at StarEx Exchange believe that this round of rise does not mean a "altcoin season". Many altcoins have fallen by more than 90% since the end of 2023. The recent rebound lacks structural trend support. Although the current market is speculative, it has not yet seen the large-scale retail participation wave driven by "narratives" in 2021. The rise of altcoins is still concentrated in some highly liquid currencies, and there has not yet been a full-blown pattern, which may suggest that the rotation is still in its early stages. In this round of rise, the funding rate did not rise significantly, indicating that the market is not bullish. Ethereum's ETF had a net outflow on 4 of the 5 trading days, and institutional funds did not flow in significantly.
The current strong rise of Ethereum has injected new vitality into the altcoin market. Geopolitical easing and the continued entry of institutional funds have jointly created a favorable macroeconomic background, but the real "altcoin season" is often built on a broader narrative consensus and user participation, which are not yet available.
Next market forecast: Bitcoin remains strong with the support of ETFs and institutional funds. Every big pullback is an opportunity to enter the market, but after the retaliatory rebound of Ethereum and altcoins, there is a high probability that they will resume the downward trend. If the US CPI and PPI are higher than expected, it will trigger concerns about "re-inflation", Bitcoin's dominance will continue to remain high, the rotation of altcoins will fail, and the rebound will be short-lived.
