Compiled by: Vernacular Blockchain

A mini- Altcoin season has recently occurred. It began with Ethereum (ETH) draining liquidity from Bitcoin (BTC) as the market pre-positioned for DATs. Subsequently, we saw Altcoin siphoning liquidity from Ethereum. Assets like ENA, WLD, HYPE, PUMP, SOL, BNB, and AVAX have performed well. Now, liquidity is flowing back into Bitcoin. But the most pressing question is: What is the probability that a market top has already occurred? We will attempt to answer this question in today's report.

Bitcoin

As mentioned in the introduction, there was a mini- Altcoin season during the summer, during which Bitcoin’s dominance dropped from 65% to 57%.

Data source: Glassnode

Ethereum led the gains, with the ETH/BTC ratio rising to 0.042 from its April low of 0.018 as liquidity shifted from Bitcoin to Ethereum.

Data source: The DeFi Report, Dune

Currently, the ETH/BTC ratio is retreating and the Bitcoin dominance chart looks set to consolidate around 57% (we still believe it will eventually fall further).

On-chain data

Long-term holders

After profit-taking in July and August, the supply from long-term holders is starting to level off – a positive sign.

Data source: Glassnode

ETF fund flows

Meanwhile, inflows into ETFs have weakened.

The good news is that outflows from ETFs are also decreasing.

Data source: Glassnode

Spot trading volume

Trading volumes have remained subdued since peaking earlier this year, suggesting a lack of significant “new money” inflows into the market over the past six months.

Data source: The DeFi Report, Glassnode

What’s next for Bitcoin?

As of writing, Bitcoin is trading at $109,000, below its 50-day SMA ($114,300) and 100-day SMA ($113,800), but still above its 200-day SMA at $103,800.

Market momentum has weakened significantly.

However, when we look for signals that the market has topped, we prefer to focus on the longer-term 50-week moving average.

50-week moving average

Data source: The DeFi Report Why the 50-week moving average?

In the past three cycles, when Bitcoin’s weekly close fell below the 50-week moving average in the fourth year of the cycle, it typically marked the beginning of a bear market.

Currently, Bitcoin’s 50-week moving average is $99,000.

Altcoin

Altcoin Quarterly Index

Data source: Coinglass

We can see the “Summer Altcoin Season” through this chart.

If you were expecting an “all-out rally”Altcoin season like in 2021, it might not feel that way.

That won't happen in this cycle. The key now is to pick the right assets and find the best entry points.

What is the “right” asset?

Assets with strong fundamentals, token economics, and market attention/narrative (e.g., institutions holding large amounts of capital).

We managed to realize decent profits on some of the Altcoin in our portfolio before the correction. If you missed out or picked the wrong asset, now might be the time to up your investment game.

Ethereum (ETH)

Ethereum has fallen below its 50-day moving average and is currently trading below the key $4,000 line.

Further declines could see the 100-day moving average at $3,700. Ultimately, however, Ethereum needs Bitcoin to hold key support levels in order to sustainably break out to new all-time highs.

Data source: The DeFi Report, Dune

"Blue Chip" MeMe Coin

MeMe Coin is currently most affected by the withdrawal of liquidity from high-risk assets.

Data source: The DeFi Report

Assuming there is still room for growth in this cycle (see below), some MeMe coins may present good entry points as of September 25, 2025. Funding rates have turned negative in the Ethereum futures market as momentum weakens.

Ideally, traders become further bearish, followed by a shift in market sentiment that triggers a short squeeze and reignites bullish sentiment.

Data source: Glassnode

Summary and Thoughts

What is the probability of the top coming?

While not impossible, we do not believe it is the case. In our view, the recent sell-off was a healthy pullback/purge and the bull market structure remains intact.

We believe excessive leverage and complacency in the perpetual contract market, particularly Altcoin, are the primary reasons. Ethereum futures long liquidations on centralized exchanges reached $480 million over the past few days—the largest such liquidation since April 2021. Furthermore, Hyperliquid and other decentralized perpetual contract exchanges have also seen billions of dollars in losses.

When something similar happened in 2021, it was just a brief blip on the road to new all-time highs.

Data source: Glassnode

In many ways, we’re seeing a similar situation to last year – a brief market rally after the Fed’s September rate cut, followed by a pullback, and then an even bigger rally in October and November.

From a macroeconomic and business cycle perspective, we view the current situation as positive:

• Corporate profits are growing
• Banks are lending
• The Fed is cutting interest rates
• Capital is still moving towards higher-risk assets (small-cap stocks are currently outperforming the broader market)
• Long-term bond yields rose modestly (as is normal given that economic growth remains strong)
• Yesterday's initial jobless claims data showed layoffs remained low.
• The ISM index appears to be about to enter expansion territory

However, market liquidity has decreased somewhat as the Treasury replenishes its "checking account," a risk we highlighted in our August 13th report to TDR Pro members.

Data source: FRED

The Treasury General Account (TGA) has increased by about $500 billion over the past few weeks.

We believe this (along with excessive leverage) is partly to blame for the cryptocurrency market sell-off.

The good news?

This process has now concluded and TGA has returned to target levels.

Looking to the future

To confirm the continuation of the bull market, we focus on the following points:

• Bitcoin: Hold the previous high of $105,000 to $107,000. If it falls below this area, the last support level is the 50-week moving average (currently $99,000). If it falls below this level, the probability of a bear market will be greater than that of a bull market.
• Ethereum: Rebound and re-enter $4,000. If it falls below, watch for a rebound near the 100-day moving average ($3,700).

Overall, the late-cycle market performance in 2021 caught many investors off guard, and we believe this trauma is reflected in current market sentiment.

Data source: Glassnode

Not only are markets currently operating at fear levels, but we are seeing a lot of cries of “the top is in” on social media.

But the reality is that almost no one can accurately predict when the true top will come.

This is how market psychology works.

Link to this article: https://www.hellobtc.com/kp/du/10/6057.html

Source: https://thedefireport.io/research/is-the-top-in#onchain-data