Altcoin bull run signal? Six on-chain indicators show accumulation of momentum in the altcoin market, and futures volume hits a new high in May.

On-chain analysis company CryptoQuant pointed out that six key indicators show that the altcoin market momentum is strengthening, including Ethereum leading the rise, Bitcoin's dominance declining, altcoin futures trading volume surging to a five-month high (accounting for 83%), most mainstream CEX altcoin futures rising, and Bitcoin retail investor demand showing a positive change over the past 30 days— the latter is seen as a signal before a major market movement for Bitcoin and altcoins.

The altcoin market shows positive signs.

The on-chain analysis company CryptoQuant recently highlighted six indicators that may suggest the momentum in the altcoin market is strengthening.

1. After Bitcoin reaches a new high, the popularity of altcoins rises.

In a new discussion on platform X (formerly Twitter), CryptoQuant analyzed how the altcoin market has gradually warmed up since Bitcoin (BTC) broke its all-time high (ATH) in mid-July.

2. How is Ethereum performing in the lead?

As the second-largest cryptocurrency by market capitalization after Bitcoin, Ethereum (ETH) is at the forefront of the altcoin market. Since Bitcoin hit a new high, Ethereum has not only managed to break through the $3,000 mark, but also approached $4,000 at one point. While still far from its all-time peak of $4,800, it is steadily approaching.

(ETH retracement percentage from historical peak | Source: CryptoQuant)

3. Whale Movements: Sharplink significantly increased its holdings

The hype surrounding Ethereum is accompanied by the large-scale purchases of the "whale" Sharplink (a strategic project comparable to ETH). Data shows that the company currently holds about 438,190 ETH.

(SharpLink Purchase ETH History | Source: CryptoQuant)

4. Why has Bitcoin's dominance declined?

As altcoins collectively start to rise, the price of Bitcoin is basically showing a sideways consolidation trend. A natural result is that the market dominance of this top crypto asset has declined.

(Recently, altcoins seem to dominate | Source: CryptoQuant)

5. Altcoin futures volume hits a five-month high

The bullish momentum in the market often attracts the speculative interest of investors. The charts clearly show a strong spike in futures trading volume related to Ethereum and other alts. Recently, the total futures trading volume in the altcoin sector reached $223.6 billion, marking the highest level in five months. As funds flow into alts, the focus on Bitcoin correspondingly shifts.

(ETH and altcoin related futures volume data | Source: CryptoQuant)

"Alts and ETH currently account for 83% of the total futures volume, while Bitcoin only accounts for 17%," the analysis company noted. Earlier this year, Bitcoin's futures volume share once exceeded 50%. On mainstream CEX, since Bitcoin hit a new high, most of its 424 futures trading pairs have recorded positive percentage rises.

6. Bitcoin retail investor demand: Key leading indicators for rise

The last metric shared by CryptoQuant is Bitcoin Retail Investor Demand. As the name suggests, this metric measures the level of demand for Bitcoin among retail investors.

(BTC retail investor demand 30-day change trend | Source: CryptoQuant)

As retail investors typically hold relatively small amounts, this indicator uses the volume of transactions with a value of less than $10,000 as a proxy to measure their activity level.

As shown in the figure above, the 30-day change in retail investor demand for Bitcoin has recently turned positive, indicating that "small fish" are showing interest in the market. CryptoQuant describes this trend as a signal we have seen before major pump events in Bitcoin and alts.

Conclusion:

The comprehensive performance of these six major on-chain indicators, particularly the significant increase in the proportion of altcoin futures trading volume and the positive turnaround in retail investor demand for Bitcoin, provides data support for the potential sustained heat of the altcoin market. Investors should closely monitor these on-chain signals and consider macro factors such as the dynamics of Bitcoin spot ETFs to assess the next direction of the market.