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Home Ethereum

Here’s why altcoin investors should be wary, despite the recent gains

April 23, 2025
in Ethereum
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Here’s why altcoin investors should be wary, despite the recent gains
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  • As the leading altcoin, Ethereum’s performance against Bitcoin was an eyesore and a discouragement for investors.
  • The rising Bitcoin Dominance trend meant that the king of crypto was where most of the capital was still headed.

As the largest altcoin in the market, Ethereum [ETH] has the potential to swing investor sentiment toward the altcoin market.

Yet, it has been in a severe downtrend since January, losing 56.6% since January’s high at $3,744. The falling network activity and fees reinforced this bearish outlook.

ETH/BTC Weekly Chart

Source: ETH/BTC on TradingView

The ETH/BTC was near the summer 2019 levels. It was hoped that the late 2020 level would halt the bearish progress, but that has not been the case. Further losses for ETH/BTC were likely, as confidence in Ethereum was low.

This was not good news for the rest of the altcoin market. Was it a sign that the altcoin market would struggle to keep pace with Bitcoin [BTC], too?

 Should investors hope for sustained altcoin gains?

Altcoin Market Capitalization

Source: TOTAL3 on TradingView

The altcoin market appeared to recover brightly over the past two weeks. The TOTAL3 was the altcoin market cap, but excluding Ethereum. It fell below $750 billion in the first week of April, but has nearly climbed back above this level since then.

However, it was still in a bearish trend. The recent lower high at $780 billion, as well as the swing high set in March at $853 billion, must be surpassed before altcoins can be said to show long-term strength.

Altseason Index

Source: Blockchain Center

At press time, the altcoin season index was at 20, indicating it was Bitcoin Season. If 75% of the top 50 crypto assets performed better than BTC over the past ninety days, it can be considered alt season.

See also  BNB: $710 or $603, which way will the altcoin go?

The market was a long way from this situation.

Bitcoin Dominance Chart

Source: BTC.D on TradingView

The Bitcoin Dominance (BTC.D) tracks the share of BTC’s market cap against the entire crypto market cap. Its rising trend over the past two years was a sign that altcoins have bled against BTC. The most notable example would be ETH/BTC, as seen earlier.

The BTC.D was above 63.8%, a level that had been a support back in early 2020, and was flipped to resistance in 2021. Therefore, with this level flipped to support once again, the BTC.D was set to rise higher.

Investors who were hopeful of an altcoin market rally based on the gains some tokens saw over the past two weeks should remain cautious. Even if the short-term outlook was bullish, long-term forces were at work that would make any sizable altcoin rally hard to achieve.

Next: AVAX could soar by 21%, but on one MAJOR condition

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  • As the leading altcoin, Ethereum’s performance against Bitcoin was an eyesore and a discouragement for investors.
  • The rising Bitcoin Dominance trend meant that the king of crypto was where most of the capital was still headed.

As the largest altcoin in the market, Ethereum [ETH] has the potential to swing investor sentiment toward the altcoin market.

Yet, it has been in a severe downtrend since January, losing 56.6% since January’s high at $3,744. The falling network activity and fees reinforced this bearish outlook.

ETH/BTC Weekly Chart

Source: ETH/BTC on TradingView

The ETH/BTC was near the summer 2019 levels. It was hoped that the late 2020 level would halt the bearish progress, but that has not been the case. Further losses for ETH/BTC were likely, as confidence in Ethereum was low.

See also  THIS Ethereum metric just hit its 2016 levels; history tell us ETH's price will...

This was not good news for the rest of the altcoin market. Was it a sign that the altcoin market would struggle to keep pace with Bitcoin [BTC], too?

 Should investors hope for sustained altcoin gains?

Altcoin Market Capitalization

Source: TOTAL3 on TradingView

The altcoin market appeared to recover brightly over the past two weeks. The TOTAL3 was the altcoin market cap, but excluding Ethereum. It fell below $750 billion in the first week of April, but has nearly climbed back above this level since then.

However, it was still in a bearish trend. The recent lower high at $780 billion, as well as the swing high set in March at $853 billion, must be surpassed before altcoins can be said to show long-term strength.

Altseason Index

Source: Blockchain Center

At press time, the altcoin season index was at 20, indicating it was Bitcoin Season. If 75% of the top 50 crypto assets performed better than BTC over the past ninety days, it can be considered alt season.

The market was a long way from this situation.

Bitcoin Dominance Chart

Source: BTC.D on TradingView

The Bitcoin Dominance (BTC.D) tracks the share of BTC’s market cap against the entire crypto market cap. Its rising trend over the past two years was a sign that altcoins have bled against BTC. The most notable example would be ETH/BTC, as seen earlier.

The BTC.D was above 63.8%, a level that had been a support back in early 2020, and was flipped to resistance in 2021. Therefore, with this level flipped to support once again, the BTC.D was set to rise higher.

See also  Ethereum: THIS group reduces its positions: What it means for ETH

Investors who were hopeful of an altcoin market rally based on the gains some tokens saw over the past two weeks should remain cautious. Even if the short-term outlook was bullish, long-term forces were at work that would make any sizable altcoin rally hard to achieve.

Next: AVAX could soar by 21%, but on one MAJOR condition
Tags: AltcoingainsHeresInvestorswary

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Memecoin Project Obama6900 (OBX) Joins the Fight Against Malaria with Long-Lasting Insecticidal Nets (LLINs)

October 28, 2023
Tezos 2023 Outlook: An Overview of Tezos (XTZ)

Tezos 2023 Outlook: An Overview of Tezos (XTZ)

November 2, 2023
UK risks regulating NFTs the wrong way, says Mintable CEO

UK risks regulating NFTs the wrong way, says Mintable CEO

October 30, 2023
Capturing the Growth of Asset-Backed Finance via Blockchain-Enabled Opportunities

Capturing the Growth of Asset-Backed Finance via Blockchain-Enabled Opportunities

August 3, 2024
Ethereum crosses $3.2K as L2 crosses new milestone: What now?

Ethereum crosses $3.2K as L2 crosses new milestone: What now?

May 6, 2024

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EDITOR'S PICK

Ethereum Whales Are Quietly Accumulating—Is A Major Price Breakout Coming?

Ethereum Whales Are Quietly Accumulating—Is A Major Price Breakout Coming?

October 17, 2024
BNB sees renewed demand – Here’s what prompted it

BNB sees renewed demand – Here’s what prompted it

November 8, 2023
Stacks, Moonriver, Hedera Network and Iron Fish Join Axelar’s Interchain Amplifier

Stacks, Moonriver, Hedera Network and Iron Fish Join Axelar’s Interchain Amplifier

May 7, 2024
Ethereum Yet To Shake Off 2022 Bear Hangover: Glassnode

Ethereum Yet To Shake Off 2022 Bear Hangover: Glassnode

November 2, 2023

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