There are a few key signs that typically trigger an altcoin rally.
For starters, with almost 60% of capital flowing into Bitcoin (BTC) during periods of risk, altcoins tend to remain capped unless BTC hits resistance. However, the dominance of BTC (BTC.D) now fails to exceed 60%. This causes the market to start speculating that another correction is brewing.
Take a look at the story – Every time BTC.D hits the resistance line (also known as Altcoin accumulation line), it reverses sharply. In 2018, BTC.D reached over 72% and triggered a crash. In 2021, it reached more than 73% and caused another crash. Now in 2025, BTC.D has reached over 64%, and at press time it appeared to be forming a potential breakdown structure.
However, here’s the interesting part: the 2021 altcoin rally (the most bullish on record, when the seasonal Altcoin Index surpassed 100) aligned perfectly with the breakout of Ethereum (ETH) against BTC. From a technical perspective, ETH/BTC surged over 212% that year, serving as the real trigger for the altseason.
Fast forward to today, and the story seems different. There are few signs of capital flowing into Ethereum. Sure, ETH staking is at an all-time high of 31.6% of the total supply, but ongoing ETF outflows are limiting the effect of this supply squeeze. The result? The ETH/BTC ratio is already down almost 10% year to date, putting pressure on the typical ETH-led altcoin rally.
That said, the role of Solana (SOL) in sparking altcoin rallies cannot be overlooked. In 2023, the SOL/BTC ratio ended the year up almost 300% while ETH/BTC fell around 30%. Notably, this surge coincided with the breakout of the Altcoin Season Index, fueling a true alt season at the start of the first quarter of 2024.
Naturally, the question is: are we seeing a similar dynamic shaping this cycle?
Institutional money moves to SOL as altcoin pattern strengthens
There are a few key differences between the 2023 cycle and the current cycle.
At the time, SOL/BTC broke out, aligning perfectly with the Altcoin Season Index and sparked a true altseason. This time around, the ratio is already down almost 16%, making it almost twice as weak as ETH/BTC – a sign that the dynamics of this cycle could play out differently.
Another notable divergence concerns Solana’s ETF business. According to Lookonchain data, Solana ETF inflows have been relatively larger than those of Bitcoin and Ethereum. Over the last 7 days, Solana’s net flows were -$12 million. Small, but much less negative than its peers.
Meanwhile, the one-day net flow jumped to +$1.26 million, the strongest of the three..
Interestingly, a similar pattern could also occur at the fundamentals level.
A strong revenue stream on a network directly reflects its usage. The logic is simple. More transactions mean higher fees and more on-chain economic activity. Over the past 24 hours, Solana generated 2x the revenue of Ethereum, giving institutional capital a solid foundation to build on.
In this context, the SOL/ETH ratio around 0.04 begins to look significant. However, for a true altcoin rally, a SOL/BTC breakout remains the real trigger.
Obviously, it’s too early to say we’re repeating 2023. However, if SOL/BTC gains traction while BTC.D continues to weaken, we could see early signs of a SOL-led altercation, making it a key trend to watch closely in the coming weeks.
Final summary
- ETH/BTC is down this year, limiting a typical alt season, while SOL has seen relatively stronger flows of late.
- The SOL/BTC breakout, combined with the weakening BTC.D, could signal the early stages of a SOL-led altcoin rally.
