BitMEX Alpha: The signals for altcoin season are becoming clearer

Author: BitMEX

It's not a meme; it's data speaking. We judge that an early altcoin season is unfolding, and the reasons are simple:

• Market Structure: TOTAL3 (the total market cap of altcoins excluding BTC/ETH) is stabilizing relative to the two major cryptocurrencies; even without a breakout in BTC/ETH, market breadth is expanding.
• Leading Direction: SOL/ETH is rising, funding rates are moderate, and there are few forced liquidations—this indicates real buying, not short squeezes.
• Catalytic Factors: The U.S. government is promoting blockchain applications, with the Department of Commerce putting official data like GDP and PCE on-chain (via Chainlink/Pyth), and the fundamental revaluation of platform tokens is bringing "offshore" funds back onshore.
• ETF Funding: ETFs are still seeing net inflows but are clearly cooling down; the market cap/net asset value ratio (m/NAV) of ETH-related DATs is relatively low → the attractiveness of issuing new tokens is declining, potentially leaving more room for altcoins.

Signal 1｜Market Structure and the Resilience of TOTAL3

The price movements over the past five days resemble the beginning of an altcoin season rather than a rotation of "only mainstream coins." TOTAL3 did not make new lows while BTC and ETH were fluctuating; the derivatives side remains orderly: funding rates are close to neutral, and passive liquidations are limited—pointing to genuine demand led by spot trading. For traders, the focus is clear: market breadth can expand without waiting for BTC/ETH to make new highs; selecting altcoins in pair trading offers better cost-effectiveness.

Signal 2｜SOL Outperforming ETH, Starting to Rotate

The rise of SOL/ETH, along with stable funding rates and no obvious signs of short squeezes, indicates real buying through active allocation. Historically, this often leads to a rotation of high liquidity mid-cap and functional tracks; it also provides a lower β expression: going long SOL / short ETH.

Signal 3｜Mainstream Coins "Stable, but Not Leading the Rhythm"

Source: https://www.strategicethreserve.xyz/

The fundamentals of mainstream coins remain positive, but the marginal momentum of ETH and BTC is declining: pullbacks have support, but upward moves lack follow-through, making it difficult to push new highs directly.

Taking Ethereum-related stocks as an example, the m/NAV often hovers around 1.0--1.1×, underperforming spot ETH, making it hard to sustain the chain of "new issuance + passive spot buying." Our judgment is that the bottom-fishing in mainstream coins is solid, while the chasing-up is weak, and the marginal risk is more reasonably shifted to altcoins with event catalysts.

Signal 4｜Practical Blockchain Applications Are Advancing

There are strong catalysts on both the policy and infrastructure fronts: the U.S. Department of Commerce has announced that actual GDP, PCE, and other official series will be put on-chain (via Chainlink, Pyth, covering Arbitrum, Avalanche, Base, etc.), providing authoritative and machine-readable data that opens new scenarios for data-driven DeFi, tokenized risk control, and event markets.

At the same time, blockchain-based applications have gained recognition and adoption from mainstream institutions, with Numerai (a hedge fund incentivized by $NMR and driven by AI) receiving a $500 million strategy capacity commitment from JPMorgan Asset Management.

Platform tokens are strengthening in phases: OKB is boosted by adjustments in the token model, and CRO is gaining attention due to news related to investments from the Trump family fund. These developments do not rely on BTC/ETH making new highs—this is a typical characteristic of the early altcoin season.

Conclusion｜Trading Framework

Current picture: mainstream is orderly, ETF net inflows are cooling, DAT premiums are thin, and hard catalysts are directing funds downstream.

The strategy continues to prioritize pair trading and news:

• Core Position: Long SOL / Short ETH; focus on new coin rises.
• Satellite Position: Anchor on event catalysts, gradually allocate to news-driven altcoins during pullbacks; until funding flows, funding rates, or key proxy indicators clearly signal a style switch.

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