Bullish signals in the alternative coins market
- The TOTAL2 index (the market value of alternative coins) rose 35% during the third quarter.
- The alternative coins season index closed the third quarter near 61, regaining levels from the late second quarter.
- Bitcoin dominance (BTC.D) remained below 60%.
- The index broke through the 50 level strongly, recording six consecutive weeks of higher highs.
- Bitcoin is still struggling to break above $90,000.
The technical challenge for the ETH/BTC pair
- October began at resistance at 0.03.
- Down 2.33% from the early-September peak of 0.033.
- Capital inflows into Ethereum will remain limited until this level is broken.
Critical signs of weakness
The article points to worrying fundamentals undermining the rally:
- The stablecoin market cap remains notably below its May peak.
- New USDT liquidity is insufficient to sustain altcoin momentum.
- Ethereum ETFs recorded "$17.25 million in outflows".
- On-chain data shows heavy distribution (selling by holders).
- Bitcoin recorded "$31.7 million in net inflows" over the same period.
- Institutional capital is flowing into Bitcoin rather than Ethereum.
Risk of a "bear trap"
The article suggests that Ethereum consolidating near $2,700 could be a potential bear trap, as leverage in long positions rises. It warns that this could "scare late leveraged longs," triggering a downward spiral if spot-market weakness persists and spreading into a broader altcoin market crash.
Conclusion
An altcoin rally may be "premature" unless enough new liquidity flows in through stablecoins.
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