Bitcoin's decisive break above $118,000 has triggered a significant capital rotation into altcoins, with Ethereum (ETH), Solana (SOL), and XRP emerging as primary beneficiaries. According to Presto Research analyst Rick Maeda, BTC's new all-time high acts as a liquidity signal, historically pulling sidelined capital into the market and eventually rotating toward large-cap altcoins. Early signs show ETH testing year-to-date highs, SOL reclaiming the $160 level, and XRP gaining traction amid cooling BTC volatility.
Jeff Mei, COO at BTSE, projects ETH could reclaim $3,200 and SOL may return to the $200 mark, citing institutional rebalancing and Ethereum ETF inflows as key drivers. LVRG Research director Nick Ruck notes this rally differs from past cycles, with U.S. regulatory clarity accelerating DeFi adoption. Simultaneously, DeFi tokens like SEI, ENA, and layer-2 solutions such as OP and ARB surged up to 28%, while legacy coins (LTC, BCH, XMR) stagnated.
Bitcoin dominance fell to 63.5% from 64%, signaling altcoin momentum. BitMEX founder Arthur Hayes predicts a 'monster alt season', though Mercuryo CEO Petr Kozyakov cautions the surge may be short-lived as institutions prioritize Bitcoin's store-of-value narrative.