### Key Takeaways
– **Ethereum has reclaimed a key level that preceded 100%+ rallies and triggered past altseasons.**
– **Altcoin market cap could surge toward $15 trillion if Bitcoin dominance repeats its post-halving drop.**
– **Despite bullish signals, ETH remains fragile, with $123B in supply near cost basis at risk of flipping into a loss.**
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Ethereum’s native token, Ether (ETH), is currently making waves in the crypto market as it has reclaimed a critical technical level that has historically indicated sharp price increases and preceded an “altseason.” This phenomenon has been observed multiple times over the last five years, suggesting a potentially bullish future for Ethereum and its altcoin counterparts.
### Ethereum’s Technical Milestone
The significant technical level for ETH is the Gaussian Channel’s mid-line, valued at approximately $2,600. This moving average-based band serves as a benchmark to track long-term momentum. When ETH closed above this level in past years, it catalyzed substantial price rallies.
For instance, during the 2020-2021 cycle, ETH surged from around $400 to over $4,800 after crossing this Gaussian mid-line. A similar trend was noted in late 2023 when ETH climbed from below $1,500 to nearly $4,000 within the span of a year.
As of May 2025, the upper band of this channel is positioned near $3,200, representing the next significant resistance point. A breakout beyond this level could pave the way for a rally toward the previous cycle high of $4,100 by July.
### An Altseason on the Horizon?
Analysts believe that the expected rally in ETH could also prompt a broader rise in the altcoin market. Market analyst Moustache noted the Gaussian Channel fractal as a key indicator, drawing attention to past performance where the altcoin market’s combined cap soared significantly after ETH closed above the midline.
In July 2020, the altcoin market cap experienced an increase of over 1,400% after Ethereum’s notable movement, while a more modest, yet impressive, 200% growth was observed following the midline breakout in November 2023. The tax return of such movements strengthens the narrative of an impending altseason.
Additionally, the occurrence of a post-Bitcoin-halving drop in dominance could further set the stage for altcoins to flourish. The last two cycles saw Bitcoin dominance fall sharply around 400 days after halving events in 2017 and 2021, triggering altcoin rallies. With the next halving on the horizon in April 2024, similar dynamics might transpire within the next 100 days.
### A Fragile Market – Risks Ahead
However, as enticing as the bullish signals may seem, analysts caution about potential fragility in ETH’s current state. Approximately $123 billion of ETH’s market cap is held by investors who purchased their tokens between $2,300 and $2,500, based on onchain data from Glassnode.
If ETH’s price dips even slightly below this critical range, it could compel many holders into a loss, potentially triggering panic selling and exerting downward pressure on the market. This situation raises an alarm regarding the sustainability of the current rally; while Ethereum shows notable technical strength, its support structure is shallow unless it can decisively move away from this cost basis.
### Final Thoughts
While ETH’s reclaiming of pivotal levels and the potential for a massive altseason create a narrative of optimism within the crypto community, the underlying risks shouldn’t be overlooked. Investors are encouraged to remain vigilant, as market movements can be abrupt and the landscape ever-changing. Always engage in personal research and consider market dynamics before making investment decisions.
