There are usually a few key signs that start an altcoin rally.
For starters, given that around 60% of capital flows into Bitcoin (BTC) during risky periods, altcoins tend to remain at bay unless BTC hits resistance. However, BTC dominance (BTC.D) cannot break 60% at the moment. This caused the market to start predicting that another correction might be coming.
Take a look at history – BTC.D has reversed sharply every time it hit the resistance line (also called the Altcoin Accumulation Line). In 2018, BTC.D rose over 72% and triggered a crash. It rose above 73% in 2021, causing another crash. Now, in 2025, BTC.D has reached 64%+ and appeared to be forming a potential breakout structure at press time.
But here’s the interesting part: the 2021 altcoin rally (the bullishest rally on record when the Altcoin Season Index rose above 100) is perfectly aligned with the rally in 2021. Ethereum (ETH) Breakout against BTC. From a technical perspective, ETH/BTC was the real trigger for the alt season, rising over 212% that year.
Fast forward to today and the story looks different. There is little sign of capital flowing into Ethereum. Of course, ETH staking has reached a record high of 31.6% of total supply, but ongoing ETF outflows are limiting the impact of this supply squeeze. Conclusion? The ETH/BTC ratio is down almost 10% so far this year, suppressing the typical altcoin rally led by ETH.
This said, Solana (SOL) Its role in triggering altcoin rallies cannot be ignored. In 2023, the SOL/BTC rate finished the year up almost 300%, while ETH/BTC fell nearly 30%. Notably, this surge coincided with the rise of the Altcoin Season Index, sparking a full-blown alt season by the first quarter of 2024.
Naturally, the question is: Do we see a similar dynamic shaping this cycle?
Institutional money moves to SOL as altcoin setup strengthens
There are a few key differences between the 2023 cycle and the current cycle.
At that time, SOL/BTC was bullish and perfectly aligned with the market. Altcoin Season Indexand sparked a full-blown subseason. This time the rate has already fallen by almost 16%, making it almost twice as weak as ETH/BTC. This is a sign that the dynamics of this cycle may work differently.
Another notable difference is Solana’s ETF activity. Solana’s ETF inflows were relatively stronger than both, according to Lookonchain data bitcoin and Ethereum. In the last 7 days, Solana’s net flow was -$12 million. It’s small, but much less negative than its peers.
Meanwhile, 1-day net flow jumped to +$1.26 million, the strongest of the three..
Interestingly, a similar setup can also apply at a fundamental level.
A strong revenue stream on a network directly reflects its usage. The logic is simple. More transactions mean higher fees and more economic activity on the chain. In the last 24 hours, Solana has generated 2x revenue from Ethereum, giving institutional capital a solid footing.
In this environment, it starts to look important for the SOL/ETH ratio to remain around 0.04. However, a breakout in SOL/BTC is still the real trigger for a full-blown altcoin rally.
Frankly, it’s too early to say we have a repeat in 2023. However, if SOL/BTC gains traction while BTC.D continues to weaken, we could be seeing the first signs of a SOL-led subseason, making this an important trend to keep a close eye on in the coming weeks.
Final Summary
- ETH/BTC has been declining this year, capping a typical alt season. SOL, on the other hand, has seen relatively stronger flows recently.
- The SOL/BTC breakout, combined with the weakening BTC.D, could signal the early stages of the SOL-led altcoin rally.
