Analysts say investors are rotating into major altcoins amid monthly rebound

Soft U.S. inflation and a $600 billion trade pact between the United States and Saudi Arabia triggered an overnight market rebound across cryptocurrencies and equities, QCP Capital noted in a Wednesday update.

While the S&P 500 recovered from its 17% decline in April to log flat year-to-date performance, analysts said crypto led the general uptick. Experts believe digital asset momentum may extend further, cushioned by renewed risk-on sentiment from tariff negotiations and cooling inflation.

“Looking ahead, we believe there is further room for digital assets to rally,” said QCP Capital, which pointed to Coinbase’s upcoming inclusion in the S&P 500 as a short-term price catalyst.

Alts gain ground

Following the Tuesday Core CPI release, U.S. spot exchange-traded funds tied to crypto market leaders Bitcoin and Ether saw mixed flows. Spot BTC ETFs recorded $96.14 million in net outflows. Meanwhile, spot ETH products witnessed $13.37 million in net inflows, per SoSoValue data.

Ether and alts also outperformed Bitcoin in daily price action. ETH jumped 5% in the last 24 hours and crossed $2,600. The Block’s price page showed that SOL and XRP were up nearly 4%.

In contrast, BTC floated at $103,500 with a 0.1% change over the past day. The data echoed this week’s altcoin surge, which has outclassed BTC despite its return to a $2.1 trillion market cap.

TradingView data indicated that Bitcoin dominance dropped to 62 from around 65, suggesting a BTC lull as alts possibly catch up, BRN Lead Research Analyst Valentin Fournier said via email. On the monthly timeframe, ETH, SOL, and XRP have soared over 58%, 35%, and 23%, respectively, compared to BTC’s 22% leap.

"Altcoins once again led the broader rally, and the rotation into altcoins remains a key theme,” added BRN's Fournier. “Ethereum and Solana are showing continued strength, confirming the thesis that they still have significant room to catch up as Bitcoin consolidates near local highs.”

Ether's clearer picture

QCP’s Tuesday note attributed BTC underperformance against altcoins to a “tug-of-war between its identity as digital gold and its function as a risk-on proxy.” Per the trading desk, this dynamic could kneecap Bitcoin’s directional conviction and keep BTC range-bound.

“ETH, by contrast, appears to be constructing a cleaner story,” QCP analysts argued.

“Funding remains neutral, and options skew toward puts over calls, indicating that the breakout is not driven by speculative excess. We are also beginning to see a re-emergence of longer-dated option flows, which could be an early sign that ETH is positioning itself as the market’s next major allocation play.”