Whales Trigger Altcoin Exodus Amid Ethereum's Slide

Ethereum’s momentum has faded, marking the end of a prolonged altcoin rotation phase, according to on-chain analytics firm CryptoQuant. The Altcoin Season Index, a metric tracking the relative performance of altcoins versus Bitcoin, has declined sharply from 88 in early September to 65 as of late September, signaling reduced breadth in altcoin outperformance. This trend coincides with Ethereum’s correction, which has dropped over 6% amid increased selling pressure from large holders. Over 420,000 ETH were moved off exchanges last week, reflecting a shift in capital from riskier positions to safer assets.

The decline in Ethereum’s dominance underscores a broader market recalibration. Traders have begun rotating out of aggressive altcoin positions, with institutional and retail participants adopting a more cautious stance. A whale sold $72.88 million in Ethereum ahead of the market dip, highlighting the risk-averse behavior of major players. This marks a reversal from September’s earlier dynamics, where capital flowed into altcoins amid declining Bitcoin dominance and rising volumes. The current pullback suggests that the initial wave of rotation has reached a critical inflection point.

CryptoQuant’s analysis highlights structural changes in altcoin season dynamics compared to previous cycles. Unlike 2024, when a lack of on-chain activity in Ethereum withdrawal data eased fears of a correction, this cycle has seen prolonged capital outflows from Ethereum. The altcoin rotation, which began in September, has extended beyond typical expectations, with Ethereum’s role as a bellwether for altcoin performance now under pressure. Analysts attribute this to macroeconomic uncertainty, including the Federal Reserve’s recent 25-basis-point rate cut, which failed to spark a sustained rally.

The Altcoin Season Index’s retreat to 64 further reinforces the shift in market sentiment. While the index remains above the 50 threshold—indicating altcoin season is still in play—it has fallen from a peak of 75 in mid-September. This aligns with Ethereum’s price action, which has struggled to reclaim $4,200 after a 6% pullback. On-chain data shows reduced trading volumes and lower derivatives open interest for Ethereum, suggesting diminished conviction among traders. Meanwhile, Bitcoin dominance has edged higher, with altcoin market capitalization stabilizing at $1.7 trillion after a 90-day rise from $1.2 trillion.

Looking ahead, market participants are preparing for a more fragmented altcoin landscape. CryptoQuant notes that traders are prioritizing safety over speculative gains, with Ethereum ETF inflows slowing and stablecoin issuance remaining a key liquidity driver. The absence of a clear macroeconomic catalyst, coupled with regulatory uncertainties, has dampened momentum. Analysts warn that without a significant shift in monetary policy or institutional adoption of altcoin-specific products, the current consolidation phase could persist into the fourth quarter.

The end of Ethereum’s recent rally and the broader altcoin rotation underscores the maturing nature of the crypto market. Unlike earlier cycles, where broad-based altcoin participation drove gains, this phase has seen a more selective approach, with capital favoring established smart contract platforms over speculative tokens. As traders await clarity on Fed policy and potential spot Ethereum ETF approvals, the focus remains on Ethereum’s ability to stabilize and reassert its role as a catalyst for altcoin activity.

Source: [1] Altcoin Season Coming To An End, CryptoQuant Data Suggests (https://coinpedia.org/news/altcoin-season-coming-to-an-end-cryptoquant-data-suggests/)

[2] Altcoin season 2025 is almost here… but the rules have changed (https://cointelegraph.com/magazine/altcoin-season-2025-altseason-here-rules-changed/)

[3] Ethereum Correction Sparks Altcoin Season Doubts (https://coinedition.com/altcoin-season-index-drop-ethereum-correction/)

[4] Altcoin Season Index Retreats from Highs, Ethereum Correction Adds Pressure (https://cryptorank.io/news/feed/b8865-altcoin-season-index-drop-ethereum-correction/)

[5] Ethereum’s Trading Volume Dominance Declines as Altcoin Rotation Nears End (https://phemex.com/news/article/ethereum-volume-dominance-declines-as-altcoin-rotation-nears-end-20124)