Reviewed by Reviewed by Saman Waris Updated 14:00 EDT October 4, 2026 Share Share Share Back to Top The market is still heavily betting on altcoins
Following Q3’s 35% rally in TOTAL2, this bullish argument does not seem so far-fetched. The Altcoin Season Index also closed Q3 around 61, recovering the levels last seen in late Q2, while the BTC.D stayed well below 60
This setup is keeping the broader altcoin rally narrative alive heading into Q4
Should this structure hold, it could very well be the sign of the next strong altcoin rotation
Naturally, this places emphasis on Ethereum [ETH] as the largest altcoin
Interestingly, ETH/BTC started October by encountering resistance around 0.03, decreasing over 2.33% from its early-September peak of 0.033
Unless ETH/BTC can break above this level, capital rotation into Ethereum may continue to be limited, which is of greater significance as Bitcoin continues to consolidate
Historically, capital tends to rotate into Ethereum whenever Bitcoin’s risk-reward setup begins to appear less attractive. However, this scenario is not playing out just yet
The key question now is whether Ethereum can break the ETH/BTC resistance and lead the next altcoin rotation or if the market risks a downward swing
Looking at Ethereum’s current setup, the altcoin market may be getting ahead of itself
According to CryptoQuant, the stablecoin market cap is still down nearly from its May peak. Without fresh capital flowing into USDT, bids on ETH, SOL, XRP, and a slew of other altcoins cannot provide the liquidity needed to propel the rally higher
Notably, this also lines up with weakening spot demand for Ethereum, as ETH ETFs witnessed $17.25 million in outflows, and on-chain insights suggest heavy distribution. Altogether, it indicates that the altcoin’s recent bullish move could be ahead of Spot demand
The key takeaway? These outflows occurred at the time when Bitcoin saw $31.7 million in net inflows. This suggests that the institutional capital is flowing into BTC rather than ETH, which could hurt Ethereum’s bullish scenario
Against this backdrop, the rising FUD surrounding Ethereum begins to carry more weight
With long positions diverging from the technical and rotation context, ETH’s consolidation near $2.7k looks like a bear trap that can spook late-leveraged longs and drive a downward spiral if Spot weakness persists
In turn, this could trigger a cascade that would spill into the broader altcoin market, leaving the Altcoin Season Index without enough momentum for an “altcoin cycle” to emerge
Ritika Gupta is a coin-based journalist at AMBCrypto who focuses on how economic and political trends impact cryptocurrencies. A social sciences graduate from Gargi College, she reports on AI, DeFi, Web3, and blockchain, using her hands-on experience to turn complex crypto developments into clear, practical insights for readers
