In recent days, crypto traders have been analyzing market trends for signs of a new altcoin season. However, the current situation and data indicate potential difficulties.
Bitcoin Dominance and Its Impact on Altcoins
On the 3-day chart, Bitcoin dominance is still holding above a key support zone between 60.5% to 61%. This is important because when Bitcoin dominance is rising or stable, it typically indicates that investments remain with Bitcoin rather than moving into altcoins like Ethereum or Solana.
A recent slight dip in dominance has allowed altcoins to bounce a bit, but it is not enough to confirm a real altcoin rally. Analysts warn that until Bitcoin dominance drops clearly below this support zone, expecting significant gains in altcoins is risky.
Worst Day for Ethereum ETFs
Adding further concerns for altcoins is the recent ETF activity for Ethereum. On Monday, massive outflows from Ethereum spot ETFs were recorded, with over $465 million withdrawn in just one day. BlackRock’s Ethereum ETF alone experienced $375 million in withdrawals.
This marked the worst single day for Ethereum ETFs ever recorded, raising new concerns about short-term investor confidence and price direction.
Resistance and Bearish Signals for Ethereum
Ethereum’s price is also showing signs of weakness. It has faced multiple rejections near a significant resistance zone between $3,900 and $4,100. Each time ETH touches this area, selling pressure takes over. This has occurred several times over the past year.
Additionally, a bearish divergence has appeared on Ethereum’s daily chart. This often signals a potential price drop. The last time this happened, ETH fell in the following weeks. A similar move could occur again.
Thus, current indicators suggest that it is premature to speak of a new altcoin season. The state of Bitcoin dominance, outflows from Ethereum funds, and key resistance levels create significant risks for altcoins.
