Stablecoin Theme Tokens Strong Alone... Are Altcoins Still Searching for a Rebound? [Altcoin Now by Kang Min-seung]

As tensions in the Middle East ease and discussions about stablecoin regulations in the U.S. intensify, the altcoin market is making limited rebound attempts, centered on Ethereum and stablecoin-themed assets.

Market experts remain focused on the selective inflow of funds into Ethereum and stablecoin-related assets, questioning whether this trend might lead to a broader recovery across altcoins. However, considering the total market cap or dominance indicators of all altcoins, there are still no clear signs of a trend shift.

Ethereum, the leading altcoin that dropped to the $2100 level last weekend, has recovered much of its losses and is currently trading at $2435 on the Binance Tether (USDT) market (₩3,351,000 on Upbit) as of 21:48 on the 27th. However, Ethereum's relative value against Bitcoin (ETH/BTC), which had rebounded to 0.02343 recently, stands at 0.02273 as of now—a slight decrease. Despite attempts at a rebound across Ethereum and other altcoins, the main inflow of funds still indicates a concentration in Bitcoin.

Indeed, Bitcoin dominance (BTC Dominance, the proportion of total crypto market capitalization held by Bitcoin) reached 65.85% on this day, marking its highest level of the year. With liquidity focusing on Bitcoin, investors are interpreted as maintaining a conservative outlook. In contrast, the expansion of funds into altcoins appears limited.

In particular, the trends of major altcoins are diverging. While overall upward momentum is constrained, select stablecoin-related tokens, along with Maple Finance (SYRUP), Movement (MOVE), and DOGE (DOG), have shown independent strength. As such, a selective approach and response may be necessary rather than hasty entry into the altcoin market.

Stablecoin Theme in the Spotlight… SEI and KAIA Surge Over 40%

Recently, U.S. stablecoin regulatory legislation, the Genius Act, passed the Senate vote, boosting the prices of tokens associated with stablecoins. Stablecoins are digital assets whose value is pegged to physical assets such as the dollar, providing relatively stable prices.

Notably, Aptos (APT) and Sei (SEI) were shortlisted as finalists for Wyoming's state government stablecoin project (WYST) in the U.S., which has strengthened their price momentum. WYST aims to launch its mainnet in August.

According to CoinMarketCap, a global crypto market data site, since the Wyoming Stable Token Commission announced its list of finalists on the 21st, SEI has soared about 42% and is trading at $0.2918 as of 21:50 on this day. Aptos (APT), which also received a high score, rose about 21.5% during the same period to $4.98. Ethereum, Optimism (OP), Solana (SOL), and Sui (SUI) were also shortlisted, but their price moves were relatively limited. SEI and APT, having been selected as top contenders, drew market attention, while expectations for the other projects appear to have had little impact.

Sky (SKY, formerly MakerDAO), which issues its own stablecoins SkyDollar (USDS) and DAI, also rose about 10% in the past month. This is also attributed to renewed interest in decentralized stablecoins amid the intensification of regulatory discussions.

In Korea, talk of a won-based stablecoin has also seen the unified chain Kaia (KAIA)—integrating Klaytn and Finschia—post a sharp surge. As speculation grows that Kakao affiliates may enter the won-denominated stablecoin market, expectations have risen that Kaia could serve as key infrastructure. KAIA jumped by nearly 100% over the past two weeks before correcting somewhat, trading at $0.1728 as of today.

"Ethereum-Led Rebound Attempts… Altcoins: Bottom Formed or Caution Warranted?"

Market analysts are split between prospects for a rebound and forecasts of continued weakness. Some believe altcoins have entered a bottom zone after a prolonged correction, but there is also cautious sentiment that a period of adjustment or sideways movement could persist for some time.

Renowned crypto analyst Willy Woo recently appeared on the SwissBlock podcast, stating, "Bitcoin's medium- to long-term liquidity indicators are weakening, with buying-side liquidity dropping noticeably compared to the initial uptrend," adding, "In contrast, on-chain data for Ethereum shows a clear inflow of funds. The key this cycle could be Ethereum's structural strength rather than a solo Bitcoin rally."

However, he also suggested it would be difficult to see the kind of vertical surge that characterized previous altcoin bull markets. Woo explained, "Institutional investors now pursue strategic, gradual accumulation rather than making massive one-off buys," and "the kind of extreme vertical uptrend seen in 2017, when there were no derivatives, is now unlikely to repeat. Future peaks are likely to appear as distributed highs instead of one big finale." He further emphasized that with increased market uncertainty, simple, predictable market flows are a thing of the past.

Some believe altcoins are starting to signal an escape from their extended correction phase. Crypto strategist Michaël van de Poppe recently noted on his YouTube channel, "Altcoins have already spent several months in a correction and are now entering a trend near the bottom of the bear market," adding, "The total crypto market cap is continuing a moderate uptrend, unlike the uncertainty in the macroeconomy—possibly signaling the market is preparing for an additional rally."

However, he also commented, "There could be further correction or a sideways phase over the next 3–6 months, so investors should maintain flexible strategies with this risk in mind."

Additionally, he analyzed that the recent rebound in the yuan and the dollar's weakness are supporting Ethereum's relative strength. Cryptocurrencies typically show an inverse correlation with the dollar's value, and recently some movements have emerged that track the yuan.

Meanwhile, some conservative views warn that large-scale capital inflows into the altcoin market are unlikely for now. Prominent crypto analyst Benjamin Cowen recently said on YouTube, "Until the Federal Reserve starts cutting interest rates in earnest, altcoins are likely to remain structurally weak," stating, "Bitcoin dominance is now near a yearly high at 66%, and altcoins are lagging behind Bitcoin in terms of capital inflows. Caution is needed in altcoin investments for the foreseeable future."

Kang Min-seung, Reporter for BloomingBit minriver@bloomingbit.io