This week, crypto markets are in the green, with altcoins leading an impressive rally. Ether (ETH) is up nearly 27%, trading above $4,600 — the first time since December 2021. It’s closing in on its all-time high of $4,868, only about 4% away.
Other notable performers include:
Solana (SOL): +20%, moving back toward $200
Dogecoin (DOGE): +18%, trading above $0.235
Chainlink (LINK): +45%, recording the strongest weekly performance among the top 50 cryptocurrencies
Bitcoin Dominance and the Altcoin Narrative
Bitcoin dominance has dropped below 60% for the first time in six months. While this might hint at altcoin season, we’re not quite there yet. Historically, a true altcoin season typically requires a 40% or more drop in BTC dominance, as seen in 2017 and 2021. Currently, the 10% decline is more comparable to movements observed around the US elections.
Ether’s Accelerating Recovery
The ETH/BTC pair has more than doubled since May, marking the best four-month performance since the last altcoin season in 2021. Ether’s recovery is clearly gaining momentum.
This rally is largely supported by US Ether ETFs. On Monday, these ETFs saw the largest single-day inflow since their SEC approval over a year ago — more than $1 billion, with BlackRock’s ETHA fund leading the way. The fund now holds nearly 3.2 million ETH, far exceeding the additional supply generated since the Merge.
BlackRock ETHA ETF details
ETH supply since Merge
On-Chain and DeFi Metrics
Ethereum’s on-chain activity shows strong momentum:
Daily active addresses are trending upward, approaching September 2023 highs (Etherscan chart)
Total Value Locked (TVL) in Ethereum DeFi is rising alongside Ether’s price (DeFiLlama ETH chart)
However, some caution is warranted: the quantity of Ether locked has slightly corrected since May, indicating possible profit-taking.
Exchange reserves for Ether are dropping sharply, reaching multi-year lows. Over $700 million worth of ETH has left major exchanges this month alone, suggesting a supply squeeze that could propel Ether toward $6,000.
Exchange reserves
Exchange netflows
Ethereum and the Stablecoin Ecosystem
Ethereum continues to dominate the stablecoin space, accounting for half of the total supply, which recently surpassed $270 billion. USDe, Ethena Labs’ stablecoin, is seeing remarkable growth, doubling its TVL since late July, coinciding with the US GENIUS Act — the first regulatory framework for US stablecoins.
The GENIUS framework imposes a 1:1 reserve requirement and federal oversight but doesn’t allow yield-bearing tokens, opening DeFi as the primary source for interest generation. Projects like Ethena and Dai’s USDS are benefiting, with Ethena’s governance token (ENA) up 36%.
DeFi token performance is also impressive:
Lido (LDO): +65% price, TVL +27%
Pendle: +41% price, TVL +22%
Spark: TVL +33%, but governance token lost ~25% due to hyperinflationary supply
Macro Backdrop
US inflation data has eased concerns. The July CPI came in stable at 2.7%, with energy prices down and core CPI at 0.2% — the highest since March. With producers and distributors absorbing tariff impacts, market expectations point to a likely Fed rate cut in September, possibly followed by up to three cuts by year-end.
Equities are also rising: NASDAQ 100 +3.33% and S&P500 +2.16% over the past five business days, hitting new all-time highs, providing bullish momentum for crypto.
Key upcoming macro events include Friday’s US Retail Sales and next Wednesday’s Eurozone CPI data.
Summary
Ether: +27%, approaching 2021 highs, fueled by ETF inflows and strong on-chain metrics
Altcoins: SOL, DOGE, and LINK leading with double-digit weekly gains
Market dynamics: BTC dominance down, but no confirmed altcoin season yet
DeFi & stablecoins: Growth driven by yield opportunities and regulatory frameworks
Macro backdrop: US inflation stable, Fed rate cuts likely, equities at record highs
Crypto markets are riding a strong wave this week, but investors should remain aware of profit-taking trends and macro influences as the rally continues.
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