The altcoin market is showing signs of a short-term recovery, but the rapidly increasing leverage and Bitcoin's continued dominance of over 60% market share suggest that volatility risks have not yet subsided.
The Altcoin Season Index has surged in less than a week, and TOTAL2 has returned to the levels seen in early February. However, the money flow is still not strong enough to confirm a clear altseason, while bulging borrowed positions make the market vulnerable to liquidation.
- Both Altcoin Season Index and TOTAL2 are rising, but not enough to confirm altseason.
- The open interest of altcoins is increasing rapidly, raising the risk of liquidation and high volatility.
- ETH is under selling pressure, while BTC, with over 60% dominance, continues to Vai the market.
Altcoins are recovering, but not yet strong enough to be called an altseason.
The recent surge in altcoins reflects a short-term Capital rotation, not a definitive signal that the trend has reversed. The Altcoin Season Index has risen 30% in less than a week, while TOTAL2 has recovered to levels seen in early February.
Notably, Bitcoin dominance has only recently retreated from its peak and remains at a high level. While BTC continues to attract the majority of capital, the upward momentum of altcoins is often limited, especially in rallies heavily reliant on short-term trading sentiment.
The rapid increase in leverage is making the altcoin market more fragile.
Altcoin open interest increased by $2.6 billion in just one week, from 29% to 32%, bringing the total value to $18.66 billion. At the same time, Bitcoin's open interest share decreased from 48% to 45%, or $29 billion.
This development shows that leverage is heavily concentrated in altcoins, while market confidence has not really improved. When speculative positions increase faster than spot cash flows, rallies are often easily reversed sharply if mass liquidation occurs.
The trading group remains in a "neutral" state, with no clear signs of FOMO. Therefore, the current upward momentum is more speculative than a trend confirmed by market breadth.
ETH and BTC continue to put pressure on market structure.
Ethereum remains a key variable for altcoin liquidation , but ETH 's spot cash flow is under sustained selling pressure. Recently, Garrett Bullish transferred the remaining $528 million worth of ETH to Binance , further tightening the market supply.
Meanwhile, the ETH/ BTC ratio is testing the 0.03 resistance zone, while Ethereum dominance has declined for four consecutive weeks. With BTC dominance still above 60% and ETH yet to regain relative dominance, the possibility of a short-term Dip for the ETH/ BTC pair remains unclear.
In this context, the biggest risk lies not in a single drop but in the possibility of positions leaning towards altcoins being liquidated simultaneously. If this pressure spreads, Capital could continue to flow back to BTC , putting further pressure on altcoins.
Summary
Altcoins are recovering in terms of price and sentiment, but rapidly increasing leverage, ETH under selling pressure, and persistently high BTC dominance mean the overall trend is not yet strong enough to confirm a clear altseason cycle.
