Altcoins show strength, Solana draws capital – Is it 2023 all over again?

There are a few key signs that usually set off an altcoin rally.

For starters, with nearly 60% of capital flowing into Bitcoin [BTC] during risk-on periods, altcoins tend to stay capped unless BTC hits resistance. However, BTC dominance [BTC.D] is now failing to break 60%. This has the market starting to speculate that another correction could be brewing.

Take a look at history – Every time BTC.D hit the resistance line (also called the Altcoin Accumulation Line), it reversed sharply. In 2018, BTC.D hit 72%+ and triggered a crash. In 2021, it reached 73%+ and caused another crash. Now, in 2025, BTC.D has hit 64%+ and at press time, seemed to be forming a potential breakdown structure.

    AD

Source: TradingView (BTC.D)

However, here’s the interesting part – The 2021 altcoin rally (the most bullish on record, when the Altcoin Season Index broke above 100) lined up perfectly with Ethereum’s [ETH] breakout against BTC. From a technical standpoint, ETH/BTC surged by over 212% that year, acting as the real trigger for the altseason.

Fast forward to today, and the story looks different. There’s little sign of capital flowing into Ethereum. Sure, ETH staking has hit a record 31.6% of total supply, but ongoing ETF outflows are capping the effect of that supply squeeze. The result? The ETH/BTC ratio is already down nearly 10% so far this year, putting the typical ETH-led altcoin rally under pressure.

That said, Solana’s [SOL] role in sparking altcoin rallies can’t be overlooked. In 2023, the SOL/BTC ratio finished the year up nearly 300% while ETH/BTC fell by around 30%. Notably, this surge coincided with the Altcoin Season Index breaking out, fueling a full-blown altseason by early Q1 2024.

Naturally, the question is – Are we seeing a similar dynamic shaping up this cycle?

Institutional money moves into SOL as altcoin setup strengthens

There are a few key differences between the 2023 cycle and the current one.

Back then, SOL/BTC broke out, lining up perfectly with the Altcoin Season Index, and sparked a full-blown altseason. This time around, the ratio is already down nearly 16%, making it almost twice as weak as ETH/BTC – A sign that the dynamics for this cycle could play out differently.

Another notable divergence is Solana’s ETF activity. According to Lookonchain data, Solana’s ETF inflows have been relatively stronger than both Bitcoin and Ethereum. Over the past 7 days, Solana’s net flows sat at -$12 million. Small, but far less negative than its peers.

Meanwhile, the 1-day net flow jumped to +$1.26 million, the strongest among the three.

Source: Lookonchain

Interestingly, a similar setup might be playing out at the fundamentals level as well.

Strong revenue flow on a network directly reflects its usage. The logic is simple. More transactions mean higher fees and more economic activity on-chain. Over the past 24 hours, Solana has pulled in 2x revenue of Ethereum, giving institutional capital a solid foundation to build on.

Against this backdrop, the SOL/ETH ratio holding around 0.04 starts to look significant. However, for a full-blown altcoin rally, a breakout in SOL/BTC is still the real trigger.

Clearly, it’s too early to say we’re repeating 2023. However, if SOL/BTC gains traction while BTC.D continues to weaken, we could be seeing the early signs of a SOL-led altseason, making this a key trend to watch closely in the coming weeks.

Final Summary

• ETH/BTC is down this year, limiting a typical altseason, while SOL has seen relatively stronger flows lately.
• The SOL/BTC breakout, combined with weakening BTC.D, could signal the early stages of a SOL-led altcoin rally.