Alt Season, Is It Finally Beginning? A Major Capital Shift from Bitcoin to Small and Medium-Sized Coins

▲ Bitcoin (BTC), Altcoin/ChatGPT Generated Image

Bitcoin (BTC) dominance is weakening. Meanwhile, the ratio of centralized exchange trading volume in the altcoin market has achieved a golden cross similar to that just before the 2021 bull market, signaling the start of a full-fledged capital rotation.

Crypto media outlet NewsBTC reported on May 12 (local time) that the ratio of centralized exchange trading volume in the altcoin market, excluding the top five assets such as Bitcoin and Ethereum (ETH), is showing the strongest upward trend since 2021. This indicator is showing in real-time how capital, previously concentrated in top market capitalization assets, is spreading to small and medium-sized cryptocurrencies, and market participants are paying attention to the possibility of a repeat of past large-scale altcoin seasons.

Analyst GugaOnchain confirmed that the 30-day moving average of altcoin trading volume has crossed above the 365-day moving average. GugaOnchain explained that the trading volume ratio indicator is a key metric for identifying structural changes in market capital flow, excluding short-term noise. In particular, there is a clear trend of individual investors and institutions expanding their interest into small and medium-sized altcoins, excluding Bitcoin, Ethereum, Solana (SOL), XRP, and BNB.

In the past, during the 2021 bull cycle, an explosive altcoin market rally unfolded after a cluster of trading volume indicators formed. Analysis shows that the start of capital rotation, with funds moving from top market capitalization assets to small and medium-sized assets, coincided precisely with Ethereum reaching its all-time high. Currently, the trading volume ratio indicator is showing signs of breaking out of its consolidation range, increasing the likelihood of significant investment opportunities amidst a highly volatile market.

The altcoin market structure has also moved out of the worst sell-off phase and entered a stabilization stage. The total market capitalization, excluding the top 10 assets, has formed a support line around $200 billion, marking the end of the downtrend that began at the end of 2025. Although it remains below the 50-week and 100-week moving averages on a weekly basis, making it too early to discuss a complete bullish reversal, an influx of buying pressure is being observed to break through resistance in the $220 billion to $260 billion range.

As altcoin participation on centralized exchanges stabilizes, speculative interest appears to be spreading evenly across the market. If key weekly moving averages are reclaimed, the capital rotation cycle will accelerate further, and a period of altcoin-centric yield maximization is expected to unfold. Market participants are preparing for the next upward phase by closely monitoring the stability of Ethereum's price along with any further breakout in the trading volume ratio.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*