Key Takeaways
An on-chain volume signal that preceded 2021’s major altcoin rallies is flashing for the first time in three years, even as Bitcoin’s market dominance climbed past 60.88% on May 17.
The signal, identified by on-chain analyst GugaOnchain, is triggered when the 30-day moving average of altcoin trading volume crosses above its 365-day baseline, a condition now met. The metric specifically excludes the top five crypto assets to better gauge the health of the broader market.
This "Altcoin Volume Increasing Trend" filters for sustained, structural shifts in market participation rather than short-term spikes. It comes as the total crypto market cap excluding the top 10 assets defends the $160-$180 billion support zone, stabilizing near $200 billion after a prolonged correction, according to TradingView data.
While the volume signal suggests the foundational liquidity for a broader altcoin season is building, analysts watch for a breakout in the volume ratio itself as final confirmation. A sustained move higher, coupled with continued stability in Ethereum's price, would strengthen the case for a market-wide rotation beyond Bitcoin.
Part of the rotation may be heading toward assets with improving regulatory outlooks. The CLARITY Act, a crypto market structure bill progressing through the US Senate, appears to be creating clearer winners and losers. XRP, the native asset of the Ripple network, has seen its price jump nearly 7% to $1.51 in the 24 hours following positive legislative developments. The bill includes language that could fast-track commodity status for tokens like XRP, removing a long-standing regulatory overhang from the SEC.
Similarly, Solana (SOL) stands to benefit from the bill’s "DeFi safe harbor" provisions, which would protect its large and growing ecosystem of non-custodial developers and applications. While its price reaction was more muted at a 1.68% gain to $92.70, its position as the largest DeFi ecosystem outside of Ethereum makes it a logical target for institutional funds seeking regulated exposure to the sector.
The nascent rotation into altcoins does not exist in a vacuum. It reflects a broader trend of institutional asset managers seeking new growth areas, a theme seen in traditional finance where firms like Franklin Templeton and Voya Financial continue to expand their offerings. As regulatory frameworks for digital assets mature, the crypto market is becoming an increasingly viable option for these large-scale capital allocators. The current on-chain volume trends suggest they may be starting to deploy capital beyond the well-known large-cap assets.
This article is for informational purposes only and does not constitute investment advice.
