The altcoin rally is in full swing, led by Ethereum’s recent push past the $3,000 level. This rally follows an extended stretch of market pessimism, helping boost the majority of altcoins in a positive trend. Now, with Bitcoin’s drop deepening the drift, an altcoin season might be closer than you think.

Ethereum ETH’s price has risen by 2.5%, leading the altcoin rally. Bitcoin, meanwhile, has dropped almost 3%, as capital continues to flow into the other cryptocurrencies known as altcoins.

Market experts opine that altcoins may see the most dramatic increases in recent weeks ahead. That optimism is very much warranted, especially with the TOTAL3 chart, which tracks altcoins (excluding Bitcoin and Ethereum). The chart recently moved into what some analysts are referring to as the “Banana Zone 2.0.” This zone, known as the springboard zone, usually indicates an upcoming explosive move after a time of consolidation.

Stellar (XLM) has been the standout performer, doubling its weekly performance gain to 82%, making it the biggest mover among its similar assets.

Even with this recent move, the altcoin season index is only at 32/100. This goes to show that the altcoin market is still very much under the influence of Bitcoin. The declining Bitcoin dominance indicates that the shift might be happening slowly, with altcoins starting to outperform the original cryptocurrency.

Ethereum’s strong breakout in February and March of 2024, that came just before a large altcoin rally is what everyone is looking to. The current rally resembles this scenario, sparking optimism for a broader altcoin bull market.

Altcoins are enjoying these moves as well with fresh value narratives and new application outlooks giving them fundamental impetus along the way. This is particularly seen when looking at decentralized finance (DeFi), non-fungible tokens (NFTs), and the wide world of blockchain-based applications. Perhaps institutional and retail investors alike are diversifying their dollars away from these more traditional vehicles and into these alternative digital assets.

It’s critical for Ethereum to perform, as it usually paves the path for other altcoins to follow in its footsteps. How well it can maintain its steam would open the door for numerous altcoins to do the same.

ETH continues to trade below the levels seen when ETFs were released, which seems incorrect. For the first time in over a year, ETHBTC has risen above the 200-day moving average. Several significant changes have occurred since then. For example, Grayscale’s surplus supply has been eliminated. Ethereum has secured Saylor through Sharplink/Lubin. - Evanss6

As noted by crypto analyst Evanss6, Ethereum is currently significantly below where it was at its ETH ETF release levels, making it undervalued. Evanss6 further highlights the order removal of Grayscale’s overhang supply and Ethereum’s formation of strategic partnerships as bullish factors.

With over 1,000 days of market negativity behind it, the transition to a bull market could represent a turning point for altcoins. This trend is propelled by a perfect storm of factors, including improving technology, rapid adoption, and capital market readiness, as well as changing investor sentiment.