Journalist
Posted:
As 2025 draws to a close, investors are already looking to 2026.
The focus is on the altcoin market, which has underperformed this year. Historically, when Ethereum [ETH] leads, it is often the start of an altcoin rally. In particular, it seems like we’re starting to see signs of that rotation.
Since mid-second quarter, ETH has been on a downward trend versus Bitcoin [BTC]causing the Altcoin Season Index to drop to 33. But the end of the fourth quarter looks promising, with ETH/BTC possibly bottoming out around 0.30, signaling a possible turnaround.
Source: TradingView (ETH/BTC)
As a backup to this, Ethereum dominance [ETH.D] is on the move.
On a weekly basis, ETH.D has already posted three higher highs, hitting the 13% resistance. In the meantime, Bitcoin dominance [BTC.D] has fallen below 60% over the same period, reinforcing the shift towards alts.
Sure, the Altcoin Seasonal Index hasn’t caught up yet.
However, with ETH’s Q4 ROI approaching BTC’s -18% decline, has this rotation been driven more by Ethereum than by the market? Could this be an early indication of where strategic investors are headed in 2026?
Ethereum catalysts drive early market rotation
The market is still vulnerable and support levels remain at risk.
For example, BTC is still trying to recover from the crash two months ago, which caused its price to drop by 30%. Despite some “dip purchases”, BTC has not yet fully recoveredshowing that caution still dominates sentiment.
Against this backdrop, Ethereum’s weekly run against Bitcoin could be a signal that smart money is rotating. To support this: a whale sold $132.5 million worth of BTC and raised $140.2 million worth of ETH in the past two weeks.
Source: TradingView (ETH/USDT)
It is striking that the rotation is also visible in the price action.
Ethereum is up about 15% over the past three weeks, surpassing Bitcoin’s 7% gain in the same stretch. That’s more than twice as much capital flowing into ETH, clearly supported by whale rotation as we saw above.
Add institutional adoption is increasing, with nine new partnerships taking ETH mainstream, and this rotation seems far from a fluke. Instead, it provides a solid foundation for ETH’s 2026 run against BTC.
Final thoughts
- Ethereum has been on a downward trend against Bitcoin since the middle of the second quarter, but is showing signs of reversal in the fourth quarter.
- Whale activity and institutional partnerships highlight a more Ethereum-led rotation, laying a solid foundation for ETH’s 2026 run against BTC.