Cryptocurrency investment flows tilted decisively toward alternative layer-1 blockchain leaders this past week, while the bitcoin spot ETF shine wore off in the United States. The capital rotation preludes what some analysts predict will be an explosive Q4 small-cap rally.
According to digital asset manager CoinShares, bitcoin-based products saw significant outflows along with ethereum last week, even as upstart Solana enjoyed $3 million in inflows from investors. The divergence signals interest in expanding to other emerging networks beyond legacy blue chips.
The broader demand aligns with increasing calls for an imminent altcoin breakout that leaves bitcoin in the dust after its summer resurgence. But rather than random speculative fervor lifting all boats, analysts suggest a specific technical event serves as the definitive trigger for this cycle.
Analyst expects the altcoin market cap to pop
Crypto strategist Michaël van de Poppe points to the ether-bitcoin pair (ETH/BTC) clearing resistance around 0.071 as the ‘ultimate altseason signal’ traders await. That breakout would confirm a bullish trend change relative to bitcoin as capital rotates decisively toward ethereum and decentralized ecosystem projects built atop its network.
The #Altcoin market capitalization is holding above the crucial threshold of $675 billion.
I'm expecting continuation to be happening towards $1-1.25T in the coming 2-4 months. pic.twitter.com/b1ggOn6XjN
— Michaël van de Poppe (@CryptoMichNL) January 30, 2024
Should the winds shift forcefully, Poppe estimates the total altcoin market cap will balloon as much as 125% toward $1.25 trillion—nearly double current levels. His worst-case downside target still represents 75% upside at $675 billion compared to recent troughs.