Altseason Setup Reappears as Capital Begins Shifting Away From Bitcoin

A pair of market indicators that preceded the last two major altcoin booms has surfaced once again, raising speculation that the crypto market may be entering the early stages of another rotation.

According to trader Merlijn, the same conditions that fueled explosive altcoin expansions in earlier cycles have quietly returned – though most retail participants remain unaware.

Bitcoin Dominance Starts to Roll Over

Bitcoin’s dominance has begun slipping after tapping a significant resistance zone, repeating a pattern that has historically appeared at the tail end of Bitcoin-led rallies. When Bitcoin’s share of the total market cap drops, it often reflects investors shifting toward higher-risk assets such as alternative Layer-1 networks, DeFi protocols, infrastructure tokens, and emerging narratives.

This sort of dominance breakdown marked the beginning of altcoin surges in both the 2017–2018 and 2020–2021 cycles. The current move looks strikingly similar to those earlier setups, suggesting that capital may once again be preparing to flow away from Bitcoin and into the broader market.

ETH/BTC Turns Higher, Signaling a Change in Trend

At the same time, the ETH/BTC chart has bounced from its cycle lows, hinting at a potential trend reversal. Historically, Ethereum outperforming Bitcoin has been one of the clearest early clues that risk appetite is returning to the market. The sequence has repeated nearly the same way in past cycles: institutional capital flows into Bitcoin first, rotates into Ethereum next, and eventually spreads across the altcoin landscape.

In both altseasons highlighted by Merlijn, the ETH/BTC reversal confirmed that Bitcoin had likely peaked in relative strength. The current rebound mirrors that structure closely, reinforcing the argument that a new rotation phase may be forming beneath the surface.

Retail Traders Missed This Setup Twice – And They Might Miss It Again

One of Merlijn’s central points is that retail investors tend to recognize these shifts too late. During previous cycles, altcoins began climbing while broader sentiment was still subdued and attention remained fixated on Bitcoin. By the time social media chatter exploded, many of the best opportunities were already gone.

A similar quiet buildup appears to be taking shape now: Bitcoin dominance is weakening, ETH/BTC is strengthening, and yet overall sentiment remains cautious. If history repeats, the strongest moves could happen during this early, overlooked period.

A Familiar Pattern Ahead of the 2026 Cycle

Across multiple timeframes and market environments, the charts outline nearly identical structural conditions leading into each altseason: a drop in Bitcoin dominance, followed by an ETH/BTC trend reversal. Those two events have now aligned again as the market heads toward 2026.

There are no guarantees in markets – but Merlijn stresses that these two triggers rarely appear together unless a larger trend shift is underway. For traders watching closely, the implication is simple: the window for positioning may open long before retail realizes a new rotation has begun.