Altcoin Rally Looks Weakest in Years—But a Explosive Reversal May Be Coming

Altcoins are crawling through their most sluggish rally since the last crypto winter—yet don’t count them out just yet. Market cycles turn fast, and complacency could be the biggest risk for sidelined traders.

The Sleepy Altcoin Market Awakens?

While Bitcoin dominance creeps higher, altcoins linger near multi-year lows. But liquidity flows suggest a coiled spring: thin order books mean even modest buying pressure could trigger violent upside.

Traders Sleeping on the Turnaround

Perpetual funding rates remain negative across mid-cap alts—a classic contrarian signal. When the crowd leans one direction, markets love to punish them. Just ask the 'stablecoin yield farmers' now chasing 3% APY like it’s 2021.

Watch for a volatility spike as pent-up demand meets algorithmic short squeezes. The weakest rallies often birth the fiercest reversals—especially when Wall Street’s quant bots start front-running retail again.

Altcoins Struggle to Match Bitcoin’s Dominance

In its latest analysis, CryptoQuant said that the most significant surge resembling a “true” altseason occurred in early 2024, when mid- and small-cap assets briefly outperformed Bitcoin. A second phase emerged in late 2024 and early 2025, though Bitcoin retained dominance.

Current trends reveal only a mild altcoin reaction, which is far less pronounced than earlier phases. The analysis indicates that this could mark the very early stages of a broader altcoin rally, but add that investors may need patience before a stronger rotation from bitcoin to altcoins takes hold.

In a separate observation, Swissblock’s Altcoin Vector found that a renewed acceleration in the altcoin market could be underway, driven largely by Ethereum’s recent strength. Its analysis said that the broader altcoin market often moves in tandem with the ETH/BTC pair, which has rallied about 75% since its May lows and recently broken out of a downtrend. ethereum is described as the “tip of the spear,” which is leading this potential shift.

According to the tweet, altcoins have already begun aligning with ETH’s breakout, and the next significant MOVE could occur once ETH/BTC clears a key resistance level of 0.035, which may trigger a “Positive Impulse” across the market.

Cycle Won’t Finish Without Altseason

A crypto analyst said there are early signs that an altseason may be forming. However, it is still far from complete. Describing altseason as a crucial phase of the market cycle, the analyst argued that the current cycle will not end without it.

While Bitcoin has dominated most of the recent gains, the analyst believes altcoins could deliver significant surprises once they gain momentum and will capture the market’s full attention.

For now, however, the altcoin market remains in the background, and the shift toward a true altseason has yet to materialize in any meaningful way.