Can an altcoin season occur without a rally in Ethereum? Crypto community debates

• Ethereum's underperformance may have halted the highly anticipated altcoin season in the current market cycle.
• In the last two market cycles, altseasons were triggered as capital flowed from Bitcoin into top altcoins, beginning with ETH.
• Several community members suggested that the launch of Pump.fun has led to massive wealth diversion from top cryptos to lower-cap, short-lived tokens.

Ethereum's (ETH) struggles in recent months have raised questions about whether the second-largest cryptocurrency is stifling altcoin gains. ETH has historically been a major driver of altseasons, and crypto community members suggest that its current underperformance could prevent a broader altcoin rally.

Meanwhile, Pump.fun has sparked debate, as many believe the platform's speculative tokens are absorbing liquidity that would typically flow into top altcoins, shifting market dynamics in favor of these short-lived tokens.

Ethereum's lackluster performance could be hindering the next altcoin season

Ethereum's lagging performance in the current bull cycle could be costing the broader altcoin market as the much-anticipated altseason continues to stall.

Ethereum's underperformance partly stems from traders shifting capital to alternative L1s and newer narratives.

As a result, altcoin sentiment has tanked, leading to massive struggles in top tokens across key sectors — down between 50%-90% from their all-time highs, according to data from X user Nemi.

The chart below shows that the altcoin market dominance has been plunging alongside that of Ethereum when compared to Bitcoin.

TOTAL3/BTC, ETH/BTC weekly chart

ETH trader Picolas Cage argued on X that the only way for altcoins to recover in this cycle is if Ethereum sees a recovery. He also noted how ETH has led past altcoin rallies with innovative trends, including ICOs, DeFi Summer and NFTs.

This is visible when observing the previous altseasons in the last two bull markets, where Ethereum's rally fueled increased capital injection into several other altcoins.

Altseasons are periods of extensive altcoin rallies often spearheaded by ETH. In previous market cycles, altseasons occur when investors rotate capital from Bitcoin into Ethereum and other altcoins.

Pumpfun tokens are drawing capital away from top altcoins

Similarly, the rise of Solana's Pump.fun has drawn criticism, with many community members arguing that investor interest has shifted from top altcoins toward quick gains from fleeting meme tokens.

Pump.fun quickly became a leader in token launches, raking in over $500 million in revenue since it went live in 2024.

While this may seem positive for the crypto market, community members argued that it has negatively impacted the altcoin market. Several altcoins are seeing lesser inflows due to the attractiveness of the get-rich-quick nature of most meme coins.

"While Pump.fun and the meme coin sector continues to boom, it is clearly at the expense of other assets," K33 Research noted in its latest report.

For altseason to gain momentum, liquidity would likely need to rotate away from meme coins back into top altcoins, beginning with Ethereum.

Historically, altseasons have occurred about 200 days after Bitcoin’s halving event. It has been over 273 days since the halving, and an altseason has yet to go into full swing.

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