Capital Rotation Alert: Altcoin/ETH Pairs Gearing Up for a Surge

Key Points

• ETH trading volume now surpasses BTC, signaling a key shift
• Analysts forecast capital rotation into Altcoin/ETH pairs by Q4 2025
• ETH may peak at $7,000–$8,000 before the altcoin surge kicks in
• Mid-cap and low-cap alts already showing signs of outperforming ETH

For the first time since the 2022 cycle low, Ethereum’s perpetual volume dominance has overtaken Bitcoin’s. ETH now accounts for over 60% of perpetual trading volume, showing that more traders are choosing ETH-related trades over BTC.

This aligns with broader signals pointing to the early stages of altseason, a phase where altcoins begin outperforming Bitcoin.

BTC vs ETH Perpetual Volume Dominance. Source: Glassnode – Techtoken

Glassnode, a major on-chain analytics provider, highlights this as a “meaningful rotation of speculative interest toward the altcoin sector.” Market watchers agree: we’re in Phase 2,  where ETH outperforms — but Phase 3, the altcoin boom, could be just around the corner.

#Ethereum perp volume dominance has recently overtaken #Bitcoin for the first time since the 2022 cycle low – marking the largest volume skew in $ETH favor on record. This shift confirms a meaningful rotation of speculative interest toward the #altcoin sector. pic.twitter.com/Wm5bmPaaed

— glassnode (@glassnode) July 29, 2025

The big play? Riding the Altcoin/ETH pairs. These trades let investors grow their ETH bags by betting on altcoins that outperform ETH. And if timed right, the strategy could double profits, both from the altcoin and from a future ETH rally.

But there’s a risk,  and it’s double, too. If ETH dips, and the altcoin lags, losses stack up fast. That’s why timing the rotation is key.

Analysts Predict Ideal Entry Around $7K–$8K ETH

Multiple market analysts are eyeing late 2025 as the most likely time for capital to rotate fully into Altcoin/ETH pairs. One of them, Rekt Fencer, pinpointed a potential ETH peak of $7,000 to $8,000 as the moment to rotate into altcoins.

Until then, ETH may continue to dominate the charts. Analyst Colin Talks Crypto explained it like this:

“It’s ETH Season. ETH may outperform lower ALTS for a while yet… Only in the very final stage of the bull run do ALTs perform better than both ETH and BTC.”

It’s ETH Season.$ETH may outperform lower ALTS for a while yet.

if I were to take a guess, I’d say the path will go something like this, down to the lower trend line. When this line drops it means ALTs lose value relatively to ETH.

Only in the very final stage of the bull run… https://t.co/nkvvFHbP8Z pic.twitter.com/VHfiJf2ElU

— Colin Talks Crypto 🪙 (@ColinTCrypto) July 18, 2025

Supporting this, Benjamin Cowen notes that most Altcoin/ETH pairs are still down nearly 40% from their 2025 highs, and could dip more while ETH runs higher.

If you bought #ETH when it went home and feel like you are missing out on #ALT rallies, consider this:

The collective altcoin market is down 40% against ETH since ETH went home.

We are at the

“yes your alt went up, but does it bleed against Ethereum”

phase of the cycle https://t.co/iMXlEI89V5 pic.twitter.com/hGRR19XMmc

— Benjamin Cowen (@intocryptoverse) July 19, 2025

But the OTHERS/ETH ratio,  tracking mid-cap and low-cap coins, is showing signs of life. It’s climbed from 0.21 to 0.27 in just the past month. That means altcoins outside the top 10 are quietly outperforming ETH. A trend that could accelerate in Q4.

Investors watching this ratio can spot early signals of a broader altcoin season, a time when Altcoin/ETH pairs start to explode in value.

In parallel, attention is also growing around Ethereum-focused innovations like in-kind crypto ETFs, which could pull more capital into the ETH ecosystem and support its dominance through year-end.

ALTs are now down 43% against ETH since ETH went home.

ALTs will likely continue to bleed against ETH for a while.

The only way most ALT/BTC pairs go up in the short-term IMHO is if ETH/BTC goes up first.

So ETH continues to be better R/R than ALTs. https://t.co/Q26HSCGXPs pic.twitter.com/oYXi9PVHw2

— Benjamin Cowen (@intocryptoverse) July 25, 2025

How to Strategize Altcoin/ETH Pair Trades Smartly

So how should investors play this trend?

The key lies in timing and risk management. Altcoin/ETH pairs are powerful, but volatile. They offer a chance to earn more ETH and ride its future price gains,  but also expose investors to amplified losses.

Everyone is obsessed with ALTS/BTC.

The chart you should ACTUALLY be watching is ALTS/ETH.

It’s at a make or break level right now.

Alts don’t run unless ETH leads the way.

So for now the best play is to hold $ETH itself.

And when it gets to $7-8k, rotate into alts. pic.twitter.com/pFl6Qbita9

— Rekt Fencer (@rektfencer) July 27, 2025

The best time to enter these pairs is just before capital starts rotating from ETH into altcoins. According to multiple analysts, this likely happens after ETH peaks or begins to consolidate.

One approach is to:

• Accumulate ETH during its rally phase (now through late 2025)

• Monitor charts like TOTAL3/ETH and OTHERS/ETH for signs of a breakout

• Rotate gradually into Altcoin/ETH pairs as ETH hits the upper range of $7,000–$8,000

• Diversify across mid-cap and low-cap coins with strong fundamentals

Watching for short-term bounces in Altcoin/ETH pairs could also provide entry points before the big surge. Cowen and others suggest that while ETH is still the focus, early signs of altcoin strength are already visible,  especially in coins outside the top 10.

Altcoin Market Cap (OTHERS) vs ETH. Source: TradingView – Techtoken

Meanwhile, big developments like Kraken’s potential $15B IPO and increasing regulatory scrutiny, such as the Tornado Cash trial and DOJ tactics, continue to affect market sentiment and liquidity flow into ETH and altcoins.

Finally, NFT markets are also showing signs of activity, with assets like CryptoPunks experiencing a floor price rebound. These cultural drivers often signal early shifts in risk appetite — a key factor that can precede altcoin momentum.

In essence, the strategy isn’t about catching the exact bottom or top. It’s about aligning with market cycles, and knowing when to pivot.