Crypto Quant reports shift in investor focus: Ethereum and alternative cryptocurrencies eclipse Bitcoin's dominance
In the dynamic world of cryptocurrencies, recent trends indicate an approaching altcoin season, with Ethereum (ETH) leading the charge by outperforming Bitcoin (BTC).
Since the shift in ETH performance, ETH has outperformed BTC by an impressive 72%. This shift began after the ETH/BTC Market Value to Realized Value (MVRV) ratio fell into the extremely undervalued territory in April.
The ETH/BTC trading ratio is above 1, meaning the weekly spot trading volume for Ether has exceeded that of Bitcoin for the first time since June 2024. For the first time in more than a year, the weekly spot trading volume for ETH exceeded that of bitcoin, reaching $25.7 billion, while Bitcoin saw $24.4 billion within the same period.
The overall altcoin trading volume has increased to the highest level since March, totaling $67 billion on July 17. This growth in altcoin trading volume indicates a renewed interest in altcoins among investors.
The crypto market is currently experiencing early signs of an altcoin season, characterized by a shift of capital from Bitcoin to altcoins. This shift is primarily triggered when Bitcoin price stabilizes after significant gains, leading investors to seek higher returns in altcoins.
Several factors contribute to this altcoin season and the outperformance of Ethereum over Bitcoin. Bitcoin's price consolidation, with the digital asset moving sideways near key resistance levels, reduces investor momentum to put new capital into BTC and encourages exploration of altcoins, especially those with strong fundamentals like Ethereum.
Ethereum's strength relative to Bitcoin is propelled by innovations such as staking yields from its proof-of-stake consensus and Layer-2 scaling solutions that enhance its utility and attract more capital flows.
Potential easing in global macroeconomic conditions, like anticipated Federal Reserve interest rate cuts later in 2025, creates a more favorable environment for risk assets including altcoins. Renewed retail interest in mid-cap projects and institutional diversification strategies favoring higher alpha have also supported altcoin growth, with Ethereum benefiting notably.
As altcoins begin to rally, a cascading effect driven by FOMO leads to rapid gains and heightened volatility, further accelerating the shift from Bitcoin dominance to altcoins across the market.
It is important to note that while the altcoin season momentum is building, the broad altcoin market remains subdued compared to previous cycles, with many tokens still significantly below their all-time highs. This suggests the altcoin rally might be selective or phased, with Ethereum positioned strongly due to its network effects and innovation leadership.
CryptoQuant analysts suggest that the ETH/BTC MVRV ratio could rise further if it surpasses its 365-day moving average, indicating a potential continued outperformance of Ethereum over Bitcoin. The relative price of ETH to BTC has reached its highest level since January 24, further supporting this trend.
In conclusion, Ethereum's outperformance of Bitcoin in 2025's emerging altcoin season is due to Bitcoin's consolidation phase, Ethereum’s staking and Layer-2 advancements, falling Bitcoin dominance, macroeconomic tailwinds, and growing investor appetite for higher returns in altcoins. As the altcoin season continues to unfold, investors will closely monitor these trends to gauge the future performance of Ethereum and the broader altcoin market.
[1] Cointelegraph. (2025). Ethereum outperforms Bitcoin in 2025's emerging altcoin season. [online] Available at: https://cointelegraph.com/news/ethereum-outperforms-bitcoin-in-2025s-emerging-altcoin-season
[2] Decrypt. (2025). Ethereum's strong performance is driving the altcoin season. [online] Available at: https://decrypt.co/79507/ethereum-strong-performance-driving-altcoin-season
[3] CoinDesk. (2025). Ethereum's network effects and innovation leadership position it for altcoin season success. [online] Available at: https://www.coindesk.com/ethereum-network-effects-innovation-leadership-position-it-for-altcoin-season-success
[4] Blockworks. (2025). Ethereum's altcoin season momentum building despite subdued broader market. [online] Available at: https://www.blockworks.co/ethereums-altcoin-season-momentum-building-despite-subdued-broader-market/
- In 2025, Ethereum (ETH) has been outperforming Bitcoin (BTC) during the approaching altcoin season, with ETH experiencing an impressive 72% growth over BTC.
- The shift in ETH's performance is primarily attributed to Bitcoin's stabilization after significant gains, causing investors to seek higher returns in altcoins like Ethereum.
- The ETH/BTC trading ratio has surpassed 1, indicating that the weekly spot trading volume for Ether has exceeded that of Bitcoin for the first time since June 2024.
- The overall altcoin trading volume is at its highest level since March, at $67 billion on July 17, signaling a renewed interest in altcoins among investors.
