Ethereum Breaks Key Level, Altcoins Could Gain 1400%

Ethereum (ETH-USD) has recently reached a significant level that has historically triggered rallies in the altcoin market, leading some analysts to suggest the start of a full-blown altseason. However, the current market conditions, including macro risks, whale behavior, and historical price traps, could potentially derail Ethereum's trajectory.

Ethereum has closed above the mid-line of its Gaussian Channel on the two-week chart, a technical level that has historically preceded major bull runs. In the past, when Ethereum reached this level, it experienced significant rallies, such as from $1,500 to nearly $4,000 and from $400 to $4,800. If history repeats, Ethereum could break through the $3,200 resistance and push toward $4,100 by July. However, the market has evolved, and so have the associated risks.

The momentum of Ethereum has often served as a catalyst for altcoins. According to fractal data from past cycles, when Ethereum surges, altcoins (excluding ETH) have followed with gains ranging from 1,400% to 200%. This phenomenon typically occurs around 400 days after a Bitcoin halving, when Bitcoin dominance drops, and money flows into smaller tokens. The current window for this scenario is now. If Bitcoin dominance continues to slide, it could push the altcoin market cap toward $15 trillion, as some analysts suggest.

Despite the optimistic outlook, there are significant risks to consider. A substantial portion of Ethereum's market cap, over $123 billion, is held in wallets that bought between $2,300 and $2,500. If Ethereum dips below this range, many holders could face losses, potentially leading to panic selling and disrupting the rally. This fragile footing means that if momentum slips, it could quickly flip the entire sentiment.