Altcoin Traders Brace for “Strike 3” as Bitcoin Dominance Nears Decision Point

Altcoin Season Index hit 65, signaling rising rotation pressure despite Bitcoin’s 58.21% dominance hold.

Ethereum and BNB led gains with 12% and 21% weekly advances, driven by infrastructure upgrades.

Meme coins like FLOKI and JELLYJELLY surged, but Plasma’s 40% drop shows ongoing liquidity risk.

Altcoin dominance is approaching a possible inflection zone as market structure data and sentiment indicators align for what analyst Merlijn The Trader describes as “Strike 3.” His observation points to an emerging shift in capital rotation, with altcoins slowly reclaiming ground against Bitcoin

Historical trendlines support that pattern. Previous dominance peaks in 2018 and 2021 both coincided with sharp altcoin rallies before deep corrections. The current ratio now trades near 0.13, sitting on long term channel support that has defined every recovery phase across the past two cycles.

Long Term Structure Signals Rebound Potential

According to Merlijn The Trader, the dominance chart shows three projected cycle tops. The first formed in 2018, followed by another in 2021, with a third expected in 2025. Each touched an upper resistance band marked by a red trendline

Source: Merlijn The Trader on X

Price action continues to respect that formation, suggesting upside room remains as long as support holds. Notably, the lower boundary acted as a launchpad during early 2025, maintaining the cyclical rhythm that develops every three to four years.

However, near term market positioning shows caution. Bitcoin dominance increased to 58.21%, gaining 0.25 points in 24 hours. Meanwhile, the Altcoin Season Index climbed to 65 out of 100, nearing the 66 level commonly used to define an official rotation

That divergence indicates measured repositioning rather than a full shift. Institutional inflows into Bitcoin ETFs reached $627 million within 24 hours, reinforcing its perceived stability.

Layer 1 Networks Lead Capital Rotation

Ethereum gained 12.46% in seven days, with BNB advancing 21.21% over the same stretch. Infrastructure upgrades influenced those gains. Starknet introduced Bitcoin staking features, while Binance expanded AI trading integrations

The Binance market index rose 11.09% across the week, with XRP tracking an 8.53% rise following compliance driven developments from Ripple. These movements suggest that capital initially prefers structured ecosystems before speculating on lower-cap assets.

Meme Coins Show Renewed Retail Appetite

Speculative activity remains present. FLOKI rallied 36.83% after securing a European ETP listing. Micro-cap token JELLYJELLY surged 136.81% on listing momentum. However, the sharp 40.97% decline in Plasma (XPL) demonstrates that liquidity remains thin across smaller markets

That contrast shows the layered nature of the current advance rather than an indiscriminate rally. Further confirmation may arrive if Bitcoin dominance breaks below 57%, historically serving as a trigger point for broader altcoin expansion.

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