With large-cap assets consistently breaking support levels and significant unwinds occurring, investors are swiftly moving to hedge their risks. Historically, such moves frequently drive capital into altcoins, serving as a safety valve against volatility. Interestingly, the altcoin market is maintaining a stable position around the 40 mark. The Altcoin Season Index remains stable, indicating that a subtle capital rotation into alternative assets is occurring beneath the surface. That being said, a full-blown altcoin season remains a distant prospect. Ethereum dominance has returned to levels not seen since 2021, and the $2,100 mark has just been breached. ETH appears to be gearing up for another challenging stretch against Bitcoin. The chart indicates that the ETH/BTC ratio has not experienced a single positive year since 2022, and it has already declined by 12% this year. On the bullish front, BitMine has been accumulating ETH, igniting a wave of FOMO. As of now, however, it hasn’t impacted the price. In a troubling development, BMNR finds itself grappling with an unprecedented $7 billion in unrealized losses.
In recent developments, Vitalik Buterin has garnered attention by offloading 2,779 ETH for a total of $6.22 million in the last three days, achieving an average price of $2,238 per ETH. The current developments are intensifying the existing Ethereum FUD, leaving the market in a state of uncertainty. Consequently, with each level of support breached, the risk associated with ETH continues to escalate. In this scenario, traders must evaluate Ethereum’s weaknesses in comparison to potential gains in other areas, elevating ETH’s support to a more critical position than that of its competitors. Ethereum traders are assessing the risk versus reward of ETH in comparison to its competitors. Taking a broader perspective, Ethereum is indeed starting to fall behind its competitors.
At the macro level, ETH’s yearly returns have plummeted to -30%, marking the lowest performance among other high-cap altcoins. With a surge of FUD headlines and significant sell-offs by major players, maintaining a position in ETH is beginning to appear increasingly precarious. The on-chain metrics are revealing vulnerabilities as well. Ethereum’s buy/sell delta has turned red for the first time since the “Liberation Day” FUD in Q2 2025, indicating that selling pressure is gaining traction and sentiment is shifting towards caution. The current setup, when viewed as a whole, unmistakably leans toward risk.
In light of this setup, the 12% drop in the ETH/BTC ratio is not merely coincidental. Traders are reallocating their investments, as indicated by the Altcoin Season Index, which suggests that despite Ethereum’s challenges, the altcoin market is steadily maintaining its position. The $2k ETH support level is currently under significant threat. Another significant upward movement for Bitcoin and other altcoins appears improbable at this moment, as the ETH/BTC ratio is poised to persist in its downward trend further into Q1. As support levels crumble, Ethereum encounters escalating risks, internal fears, and significant selling pressure, complicating its ability to maintain dominance over Bitcoin. Traders are shifting their capital into altcoins, indicating that despite ETH facing challenges, alternative assets are maintaining their position.