Ethereum News Today: Ethereum's 27.25% ETH/BTC decline signals altcoin outperformance as market rotates capital

The cryptocurrency market has entered a pivotal phase as altcoins reclaim a critical eight-year trendline, signaling renewed optimism for non-Bitcoin assets. Total altcoin market capitalization now stands at $1.49 trillion, having shed $87 billion or 5.39% after reaching a peak of $1.8 trillion in 2021. This development, coupled with Ethereum’s (ETH) relative strength against Bitcoin (BTC), has intensified speculation about an impending "altseason"—a period historically marked by altcoin outperformance and broad market exuberance.

Ethereum’s dominance is underscored by its declining ETH/BTC ratio, which has dropped to 5.17, a level last seen before previous Ethereum-led rallies. Traders note that this 27.25% decline mirrors past cycles preceding Ethereum’s outperformance, suggesting a possible repetition of historical patterns. The shift is attributed to Ethereum’s network upgrades and growing institutional demand, which have fueled capital rotation into altcoins. Analysts such as Merlijn The Trader observe that money flow from Bitcoin to Ethereum has begun, with ETH’s weekly spot trading volume surpassing BTC’s for the first time in over a year, reaching $25.7 billion compared to BTC’s $24.4 billion [1].

The ETH/BTC Market Value to Realized Value (MVRV) ratio has entered "extremely undervalued" territory, a threshold that has historically acted as resistance since early 2023. CryptoQuant analysts suggest that if ETH’s MVRV ratio exceeds its 365-day moving average, outperformance could intensify [1]. Additionally, U.S. spot Ethereum ETF inflows have outpaced their Bitcoin counterparts, with the ETH/BTC ETF holding ratio rising from 0.05 to 0.12. Meanwhile, the ETH/BTC exchange inflow ratio—a proxy for selling pressure—hit its lowest level since 2020 in May, remaining far from "extremely high" levels that would signal bearish sentiment [1].

Ethereum’s technical strength is further supported by its role as the foundation for decentralized finance (DeFi) and non-fungible tokens (NFTs), positioning it to benefit from renewed market attention. Traders anticipate broader altcoin strength as capital shifts from Bitcoin to Ethereum and other assets. This trend is reflected in the altcoin market’s recovery from the 2022–2023 lows, with total trading volume hitting $67 billion on July 17—the highest since March 2025 [1]. Coins like Solana (SOL) and Chainlink (LINK) have also broken above their 50-day moving averages, with increased volumes supporting their momentum [4].

While Bitcoin remains the largest cryptocurrency by market capitalization, its relative underperformance has led to a decline in dominance from previous peaks to 60%. This shift has drawn attention from traders, with Ethereum overtaking Bitcoin in retail investor focus amid heightened fear of missing out (FOMO) [9]. Analysts caution, however, that macroeconomic factors and regulatory developments could influence the trajectory of Ethereum and altcoins. If Bitcoin breaks through current resistance levels, Ethereum could target $4,000, though such projections remain speculative [2].

The current dynamics highlight a maturing market where altcoins are gaining independent traction. Institutional adoption and Ethereum’s technical upgrades have strengthened investor confidence, creating conditions for sustained growth. Whether this momentum evolves into a full-scale altseason will depend on continued on-chain metrics and broader market confidence. For now, the altcoin market’s resilience and Ethereum’s outperformance paint a picture of a market in transition, with renewed attention on non-Bitcoin assets.

Sources:

[1] [Bitcoin Takes a Backseat as Investors Rotate Capital to ETH and Altcoins: CryptoQuant] [https://coinmarketcap.com/community/articles/6885f3eb3d75d403356304a9/]

[2] [Ethereum (ETH) and Altcoins Set for Double Digit Gains as ...] [https://blockchain.news/flashnews/ethereum-eth-and-altcoins-set-for-double-digit-gains-as-bitcoin-eyes-120k-cryptomichnl-analysis]

[4] [Altcoin Market Cap (TOTAL2) Breaks 3-Month Range] [https://blockchain.news/flashnews/altcoin-market-cap-total2-breaks-3-month-range-altcoin-liquidity-rotation-signals-multiple-crypto-breakouts]

[9] [Bitcoin Dominance Holds Firm as Altcoins Show Early ...] [https://cryptodnes.bg/en/bitcoin-dominance-holds-firm-as-altcoins-show-early-signs-of-rotation/]