ETH Soars 20%: Is Altcoin Season Coming?

Bitcoin Dominance Peaks: Technical Signals Resonating with Market Cycles

On May 8, 2025, ETH Soars 20%，Real Vision founder Raoul Pal noted via social media that Bitcoin’s market dominance (BTC.D) has shown DeMark exhaustion signals on daily, weekly, and monthly levels, indicating that its share of the total crypto market cap might decline from the current 64.8%. This judgment is based on the TD Sequential “top exhaustion” model, which has historically accurately predicted the interim tops of BTC.D in 2017 and 2021.

It’s worth noting that the current BTC.D level is significantly lower than the peaks of the previous two bull markets (73.6% in 2021 and 80% in 2017), suggesting Bitcoin’s control over the market is in a long-term declining trend. Meanwhile, Bitcoin’s price broke past $103,000 to hit an all-time high, while Ethereum (ETH) surged 22% in a single day to $2,200, forming a stark contrast between the two — a divergence some analysts view as an early signal of capital rotation.

Investors can track BTC.D and major token price fluctuations in real time through the JuCoin market page. Market data shows that since the bull market began in November 2024, the total crypto market cap excluding Bitcoin (TOTAL2 Index) has fallen 19.7%, while Bitcoin has risen 6.6% year-to-date, reflecting the severe underperformance of altcoins. Raoul Pal’s “Banana Zone” theory suggests that such extreme divergence is often a precursor to the second stage of the market cycle—i.e., altcoin season—where capital shifts from Bitcoin to higher-volatility assets. Historical data shows that during altcoin seasons in 2017 and 2021, tokens like ETH and SOL saw average gains of 380%-650%, far outpacing Bitcoin.

Market Shift Logic: Dual Confirmation from Technical Indicators and Capital Flows

The DeMark signal is not an isolated event. On-chain data shows that a dormant Ethereum ICO address transferred 4,200 ETH (worth approximately $93 million) to an exchange on May 8, possibly indicating whale accumulation. At the same time, a Bitcoin whale transferred 1,079 BTC (worth $109 million) to the Gemini exchange, potentially for profit-taking. This capital flow pattern closely matches the second stage of the “Banana Zone” theory: institutions and early investors reduce their Bitcoin positions while retail and high-risk appetite capital floods into altcoins. On a technical level, the ascending wedge pattern in BTC.D has been broken down, and the Altcoin Season Index has risen to 79, nearing the trigger threshold.

Ethereum’s strong breakout further reinforces this expectation. ETH surged 22.27% in 24 hours, breaking the critical resistance level of $2,200, and on-chain gas fees spiked by 340%, reflecting increased ecosystem activity. Analysts believe this is closely related to progress in the Proto-Danksharding testnet upgrade, which is scheduled for deployment in Q3 2025 and is expected to increase Ethereum’s transaction throughput to over 200 TPS. For retail investors, a JuCoin spot trading portfolio with BTC, ETH, and major Layer 1 tokens can help diversify and mitigate portfolio risk.

Risks and Challenges: Survival Rules in a Highly Volatile Market

Despite strong expectations of a market shift, potential risks should not be ignored. Bitcoin’s daily RSI has reached 72, nearing the overbought zone, indicating a possible short-term technical pullback of 5%-10%. On the regulatory front, the U.S. SEC continues to expand its scrutiny of tokens, with FLR, ADA, and others listed on the “Unregistered Securities Watchlist,” which could suppress altcoin market enthusiasm. In the macroeconomic environment, Bitcoin’s 30-day correlation with the S&P 500 Index stands at 0.82; should U.S. equities decline due to weak economic data or escalating geopolitical tensions, the crypto market could come under simultaneous pressure.

Another key variable is stablecoin liquidity. Current USDT circulation remains at $182 billion, down 12% from its 2024 peak, leading some analysts to worry that existing capital may be insufficient to support a full-blown bull market. Against this backdrop, investors should focus more on segmented sector opportunities: Ethereum Layer 2 protocols have surpassed $80 billion in TVL due to growing demand for low-cost transactions; the Solana ecosystem has stabilized at over 400 million daily transactions following the launch of the Firedancer client; and the RWA (Real World Asset) sector has seen 147% YTD market cap growth due to institutional involvement from firms like BlackRock.

Strategic Advice: Three Principles to Balance Return and Risk

For investors looking to participate in altcoin season, it is essential to establish a systematic decision-making framework. First, prioritize projects with clear use cases and ecosystem support; second, use dollar-cost averaging strategies to reduce the impact of short-term volatility; third, maintain at least 30% of the portfolio in stablecoins or Bitcoin to guard against black swan events. Historical data shows that altcoin seasons typically last 3-5 months, during which the top 30 tokens experience an average drawdown of up to 40%, making position management the core driver of excess returns.

In the long term, a market shift may accelerate industry innovation. Bitcoin’s role as a store of value is becoming increasingly clear, while public chains like Ethereum and Solana will support more complex application scenarios. Investors can earn a 12% annualized return by staking ETH or participate in Layer 2 protocol liquidity mining to capture ecosystem growth dividends within a controllable risk framework. As regulatory frameworks improve and institutional capital continues to flow in, the crypto market may usher in a new round of value reconfiguration.