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The number of Google searches on the query "altcoin" is higher than in the past five years, meeting the same level of freshness as it was back during the initiation of Ethereum. The rally coincides with Bitcoin's market share decreasing to about 60% after peaking earlier in the summer, a trend that altcoins have traditionally been attributed to perform well.

Ethereum has reached a new all-time high of over $4,500 in the recent past as investors start to turn their capital away into other major %Altcoins. Historical data, Bitcoin dominance has consistently sat between 59% and 61% with capital rotation into alternative large-caps like %Solana (CRYPTO: $SOL ) and XRP.

This trend is reflected in institutional flows. In late July, %CoinShares reported that investment products in digital assets had experienced the highest inflow in a week of any week, at $4.39 billion. Ethereum was in the lead, with $2.12 billion, nearly doubling its own record. This growth rate indicates a large-scale corporately shifting institutional wealth away against non-Bitcoin assets.

On-Chain Data Backs the Trend

According to CoinGecko, perpetual DEX trading volumes were at a quarterly high of $898 billion in Q2, even as spot activity on centralized exchanges fuels downwards. Market capitalization of the expanded altcoin market beyond Bitcoin and Ethereum, which resumed its seven-month decline in June, recaptured about $900 billion.

Kaiko's Q1 data also showed an increasing altcoin and Bitcoin volatility gap which can be a telltale sign of an early alt season. The rise in volatility is an indication that there is more risk exposure between traders in alternative assets, which has always occurred during rotation cycles.

Increased search interest alone cannot result in higher prices, but historical retail market cycles in 2017 and 2021 revealed that retail surge in interest coincided with altcoin rallies. The alignment with high search activity, decreased Bitcoin dominance, record non-Bitcoin inflows, and heightened leveraged trading closely resembles those conditions.

The continuation of the trend will hinge on the stability of Bitcoin. An upside break of the mid-60% dominance range might deflate the altcoin rally, as a stable Bitcoin price nearing its current record highs might maintain capital rotation into the rest of the market.

%Bitcoin (CRYPTO: $BTC ) is currently trading at slightly over $120,000 following a low of $118,928, which was experienced the previous day. %Ethereum (CRYPTO: $ETH ) has rocketed beyond $4,700, driven by the increased inflows in spot Exchange Traded Funds (ETFs). On Monday, the asset experienced a milestone as ETF inflows exceeded $1 billion daily. Ripple (XRP) is also trading above the $3.00 support with bulls aiming to hit the June 18 high of $3.66.