ETH breaks through the 3000 mark, BTC hits a new high again, will the altcoin season come this time?

Author: Azuma, Odaily Planet Daily

The cryptocurrency market seems to have entered a phase of accelerated upward movement. Following a significant surge the night before last, the market experienced another round of even more intense increases last night.

According to OKX data, BTC surged to 117,548.2 USDT last night, and as of 8:30 this morning, it is reported at 115,408 USDT, with a 24-hour increase of 3.75%. Even more astonishing is the altcoin benchmark ETH, which, stimulated by multiple favorable factors, broke through the 3,000 mark last night, reaching a high of 3,002.99 USDT. As of this morning at 8:30, it is reported at 2,972.21 USDT, with a 24-hour increase of 5.77%. Another altcoin leader, SOL, is currently reported at 162.7 USDT, with a 24-hour increase of 4%.

Due to the overall rise in the market (especially with ETH no longer stagnating), the altcoin market has also seen a strong recovery. As of this morning at 8:30, several cryptocurrencies among the top 100 have recorded double-digit increases, including SUI at 3.42 USDT, with a 24-hour increase of 11.7%; ARB at 0.3915 USDT, with a 24-hour increase of 11.1%; PEPE at 0.00001218 USD, with a 24-hour increase of 11.2%; and PENGU at 0.0194 USDT, with a 24-hour increase of 26.18%…

Data from CoinGecko shows that the total cryptocurrency market capitalization has surpassed 3.669 trillion USD. In terms of market sentiment, the trading enthusiasm among crypto users has also significantly increased, with today's fear and greed index reaching 71, indicating a level of "greed."

In the derivatives trading sector, Coinglass data shows that in the past 24 hours, the entire network has seen liquidations amounting to 1.078 billion USD, with the vast majority being short liquidations, totaling 969 million USD. In terms of cryptocurrencies, BTC saw liquidations of 583 million USD, while ETH saw liquidations of 242 million USD.

Reasons for the Rise: Tariff "Desensitization," Institutional Buying, Interest Rate Cut Expectations

Regarding the reasons for this round of market recovery, we provided some analysis in yesterday's market trend article titled "BTC Hits a New High of 112,000 USD, ETH Leads with a 7% Increase, Is the Dawn of Altcoin Season Emerging?"

On one hand, the market has gradually realized that the collective psychological impact of the recent tariff turmoil has significantly weakened—just like the story of "The Boy Who Cried Wolf," when a story is told multiple times, its deterrent effect naturally diminishes. The panic effect of the tariff war on the crypto market and even the global economy has greatly decreased.

On the other hand, the buying power from institutional investors, including ETFs, continues to grow. As of July 10, spot Bitcoin ETFs have maintained positive inflows for five consecutive days. After SOL opened up ETF channels, more altcoin ETFs are also expected to be approved for listing. Additionally, beyond established BTC hoarding companies like Strategy, an increasing number of listed companies have shifted their hoarding targets to ETH, SOL, and even altcoins like HYPE.

In addition to the reasons mentioned above, statements from several Federal Reserve officials last night regarding interest rate cuts also somewhat boosted market sentiment.

• San Francisco Fed President Daly stated last night: "I think there may be two rate cuts, but there is uncertainty in everyone's expectations, considering implementing rate cuts in the fall."

• Fed Governor and potential next chair candidate Waller stated that even with strong employment data in June, the Fed should still consider cutting rates at the July meeting—"I have made my point clear. The current policy interest rate level is too high, and we can discuss lowering the benchmark rate in July… When inflation is declining, we do not need to maintain such a tight policy stance; this is the decision-making logic that a central bank should have."

ETH Strong Rebound, Can the Momentum Continue?

ETH is undoubtedly the "brightest star" in this round of market increases. Since the market low in April this year, no one expected that ETH, which had the most pessimistic sentiment at the time, would outperform BTC and SOL, achieving a doubling rebound to date.

Regarding the reasons why ETH has been able to outperform the market recently, we provided a detailed analysis in the article "Five Major Upward Logics Becoming Clear, ETH May Welcome Structural Reversal." In short, supported by five major upward logics—regulatory easing, institutional accumulation, foundation reforms, increased on-chain activity, and a return of market confidence—ETH, which has undergone a long consolidation period, may welcome a structural reversal, with the potential for further upward momentum in the long term.

Jack Yi, founder of LD Capital, who previously made high-profile calls for ETH, also posted on X this morning, stating that Ethereum's breakthrough of 3,000 USD marks the start of a bull market in the crypto industry… Ethereum is severely undervalued; past bull markets were driven by ICOs and DeFi, while this round is driven by stablecoins and RWA.

However, from the perspective of short-term trends and order situations, ETH still faces strong selling pressure around the 3,000 USD mark, which means that to effectively break through this position, ETH may still need to consolidate further below. An analysis model released by CoinDesk this morning also indicates that ETH faces strong resistance around 3,000 USD, with a support area around 2,750 USD.

Additionally, the Ethereum Foundation, which was recently praised for its operational reforms, sold 1,210 ETH this morning at an average selling price of 2,889.5 USD. Considering the foundation's past "top-ticking" performance, this may also affect market sentiment to some extent.

Will the "Altcoin Season" Come Again?

ETH has always been regarded as a benchmark for altcoins. Previously, due to ETH's prolonged weakness, the altcoin market had been sluggish for a long time. However, with ETH finally experiencing a strong rebound, the market has rekindled hopes for the legendary "altcoin season."

Regarding this discussion, trader degentrading provided a different analysis on X last night, suggesting that under the market consensus that "altcoins are scams," the gradually rising short positions will ultimately become fuel for the altcoin surge due to short squeezes, thus driving the arrival of the "altcoin season."

An unprecedented phenomenon is emerging in the current market: the open interest (OI) of several altcoins exceeds their market capitalization, indicating the presence of uncovered naked shorts—because covering shorts requires buying equivalent spot assets, and when OI > market cap, there simply aren't enough tokens in the market to support it.

The historic turning point is that as Bitcoin is about to break through its previous high, we are observing for the first time: massive funds continuously flowing into ETH; institutions bidding for ETH through treasury companies; altcoin derivatives market OI hitting historical records; and a new generation of traders profiting by shorting altcoins (with the prevailing consensus that "after all, altcoins are scams").

A short squeeze storm is about to arrive. The current total market OI is approximately 172 billion USD (BTC 83 billion / ETH 40 billion), with altcoins alone accounting for 50 billion. When these massive short positions established at historical lows begin to collectively cover—this will be the structural source of demand for altcoins. The game is about to begin.

However, differing opinions still exist. Andrei Grachev, executive partner at DWF Labs, believes that most altcoins are expected to underperform Bitcoin in the future.

The approval of the "Big and Beautiful Act," seasonal market activity in the fourth quarter, and potential interest rate cuts will drive Bitcoin and crypto-related stocks to new highs. The altcoin market may partially follow the upward trend, but most mid-cap coins are expected to underperform Bitcoin, presenting opportunities once again.

It has been too long since the last "altcoin season," long enough for the term to have become a joke, and the market seems to have lost the courage to imagine it again.

This time, will it be different?