Data indicates that a new rally for altcoins can only occur if certain conditions are met on Bitcoin (BTC).

The most notable movement of the day in the cryptocurrency market was in Bitcoin's price. According to Santiment data, Bitcoin experienced a rapid rise to the $90,000 level. However, this sharp movement was not sustained, and the price quickly retreated to around $86,000. Such sudden jumps and reversals are more common during periods of increased leverage usage in the market.

Santiment’s analysis highlights especially the Bitcoin funding rates. An increase in positive funding rates indicates that investors are predominantly opening long positions with high leverage. Historical data shows that this situation often results in sharp liquidations, high volatility, and short-term peak formations. Recent pullbacks also align with this pattern.

On the Ethereum side, the picture is different
Santiment data shows that the structure on the Ethereum (ETH) front is quite different from Bitcoin. Currently, the fact that short positions in the Ethereum market exceed long positions suggests that a strong bullish conviction has not yet formed. While this indicates more limited risk dynamics for Ethereum and the overall altcoin market, the main factor still remains Bitcoin in determining the market direction.

According to the analysis, for altcoins to enter a meaningful recovery phase, Bitcoin’s funding rates need to return to neutral levels or turn negative. However, once this condition is met, it appears possible for Bitcoin’s price to again reach $100,000 and for a healthier upward trend to develop in the altcoin market.
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