The crypto market is seeing a shift in sentiment as Bitcoin (BTC) appears to have halted its rally following the recent surge to a new all-time high near $123,000. Meanwhile, Ether (ETH), the second-largest cryptocurrency by market capitalization, has taken the mantle as it crossed the $3,300 mark, hinting at an upcoming “altcoin season” as BTC continues to lose its market dominance.
The flagship crypto is currently trading around $119,892.22 from its peak of $122,838, while ETH made significant gains, adding over 7% to its price in the past 24 hours. Earlier on Thursday, Ether set a local high of $3,416 before retracing, marking its highest price level since January. Bitcoin’s decline could be largely attributed to long-term holders taking profits and investors rotating capital into altcoins.
However, the overall crypto market is in the green, as pointed out by Deutsche Bank researchers in a recent report, suggesting an amalgamation of factors, including positive sentiment surrounding the “Crypto Week” in the United States, which could result in a favorable regulatory environment for the industry in the world’s largest economy, increased institutional crypto adoption through exchange-traded funds (ETFs), and some geopolitical advancements as key catalysts behind the rally.
Optimism Surrounding US Crypto Week Fuels Crypto Market Rally
The Crypto Week could see US lawmakers potentially pass three key legislations: the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS) to create the first comprehensive regulatory framework for dollar-pegged payment stablecoins; the Digital Asset Market Structure Clarity Act (CLARITY) to establish a clear market structure and designation for crypto assets, with regulatory jurisdiction split between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC); and the Anti-CBDC Surveillance State Act aimed at prohibiting the Federal Reserve from issuing a central bank digital currency (CBDC) directly to individuals.
Voting on the bills began in the House of Representatives on Tuesday, but failed to advance to a full floor vote twice after several Republican lawmakers from the House Freedom Caucus raised concerns about the legislation not including language that explicitly banned CBDCs. President Donald Trump, who endorses the bills, spoke with the 12 representatives, including Rep. Marjorie Taylor Greene, Anna Paulina Luna, Scott Perry, Chip Roy, Andy Harris, Andy Biggs, Steve Scalise, Keith Self, Eli Crane, Andrew Clyde, Michael Cloud, and Victoria Spartz, and managed to get them on board to vote ‘Yes’.
Following a long standoff and subsequent negotiations, the House has cleared all procedural hurdles and is now set to vote on the key cryptocurrency legislation on Thursday. Trump expects the three bills to be passed by the House and the Senate before they are sent to his desk to be signed into law by the end of the week.
ETH Price Hits $3,400 as US Spot Ether ETFs Record Largest Monthly Inflow Since Launch at $2.27 Billion
Meanwhile, ETH’s price surge came amid record inflows into the nine US spot Ethereum ETFs. On Wednesday, the funds tracking the spot price of Ether saw $726.74 million in daily inflows, led by $499 million into BlackRock’s iShares Ethereum Trust ETF (ETHA). According to SoSoValue, all the funds, except the Grayscale Ethereum Trust ETF (ETHE), reported positive flows for the day.
So far in July, Ether ETFs have attracted total net inflows of $2.27 billion, the highest monthly inflow amount to date for the funds that debuted on Wall Street just 12 months ago. With total net assets worth $16.4 billion, these funds collectively control 4% of ETH’s total market capitalization, indicating how it is now viewed as a long-term institutional asset and not just a trading vehicle.
Rachel Lucas, an analyst at BTC Markets, noted that when compared to Bitcoin’s more than $2.5 billion in daily trading volume, bullish chart setups, and capital rotation, Ether is showcasing a breakout that is driven by both market fundamentals and investor sentiment.
LVRG Research director Nick Ruck said that ETH’s current momentum is backed by a growing number of publicly listed companies holding the cryptocurrency as a treasury asset. This week, SharpLink Gaming became the largest corporate holder of the crypto asset with 280,706 ETH, worth $962.36 million at current rates, held in its reserves, surpassing the Ethereum Foundation’s stockpile. The US-based online affiliate marketing and sports betting firm bought an additional 20,297 ETH on Wednesday.
Bitcoin Dominance Continues to Decline as Analysts Forecast “Altcoin Season”
According to several analysts and crypto traders, Bitcoin’s dominance over the crypto market is slipping, and historically, this pattern is a precursor to the altcoin season. In their latest altcoin analysis, prominent trader “Jelle” highlighted a breakout from a highly bullish continuation cup-and-handle setup that was forming on the TOTAL3/USD weekly price chart.
TOTAL3 represents the combined market capitalization of all cryptocurrencies, excluding Bitcoin and Ether.
They noted that a break above the neckline of the pattern at $1.1 trillion could push the metric up by about 100% to $1.98 trillion. In a Thursday X post, Jelle said that altcoins have broken out from the multi-year cup and handle, before adding: “one last hurdle to overcome before everything goes nuts”.
Veteran trader Peter Brandt also observed a similar pattern on the weekly price chart of TOTAL2, which refers to the combined market capitalization of all cryptocurrencies, excluding Bitcoin. The target of this pattern is $2.78 trillion, representing a 97% rally in the total altcoin market cap. He declared that it is officially altcoin season.
Jelle and Brandt’s positive outlook comes as altcoins registered their strongest performance against Bitcoin since November 2024, breaking out of a two-month downtrend. The fuel of the rally is none other than ETH’s 24% growth over the past week, suggesting capital rotation from BTC into other cryptocurrencies.
Bitcoin Dominance, the metric that measures Bitcoin’s market share relative to the overall crypto market, is commonly used to indicate the onset of an altcoin season. It reflects overall investment sentiment and risk appetite in the crypto market. The indicator has been trending downward since June 27, hitting an eight-week low of 62.61% on Thursday.
Several analysts have reported that Bitcoin’s market dominance had already reached its peak after altcoins began pushing higher. While the Blockchain Center Altcoin Index has tripled since June 22, only 39% of the top 50 altcoins have outperformed BTC in the last three-month period. For the altcoin season to officially begin, 75% of the altcoins need to be outperforming Bitcoin.
