2026 has started with renewed momentum in the altcoin market.
The Altcoin Season Index is ticking higher, signaling a return to alts. That said, looking back at the 2025 cycle, a clear difference stood out, with investors deviating from the usual rotation schedule.
Historically, altcoins have tended to perform better during periods of Bitcoin [BTC] consolidation. This cycle, that rotation, has never been fully played out.
The ETH/BTC ratio remained within range, capping Ethereum’s [ETH] speculative advantage.
Source: TradingView (ETH/BTC)
This dynamic was particularly evident in the 2025 returns.
From one technical lensETH ended the year with a loss of 10.97% and entered the new year below the $3k level. Bitcoin, on the other hand, held up better and ended 2025 down 6.24%, indicating that capital remained largely parked in BTC.
Still, despite the weakness, Ethereum remained strong on key on-chain metrics.
In fact, this was not isolated to Ethereum. Similar increases were observed in other L1 countries, highlighting a clear difference in this cycle.
Naturally, the discrepancy between price action and fundamentals attracts attention. With the ‘speculative’ narrative for altcoins under scrutiny, all eyes are now on L1s. Will 2026 be their season?
2026 altcoin divergence: speculation vs. utility
As the new year begins, predictions are becoming more and more exciting.
One theme in particular stands out: Layer 1 utility. From the RWA market and stablecoins to chain-specific upgrades, 2026 will begin to see a clear focus on real network activity rather than just speculative ‘hype’.
The most important part? On-chain figures support this.
As the chart below shows, Ethereum recently processed a record 2.23 million transactions, the largest in its 10-year history, while keeping fees below $0.01 and finality stable, showing no network congestion.
Source: EtherScan
What’s more, different Layer 1s show the same trend.
In this context, AMBCrypto’s thesis begins to gain weight. While 2025 didn’t deliver an ‘altcoin season’, the market still saw a clear shift, with growing ETF flows towards these altcoins showing that the trend is more than one-off.
As the market heads into 2026, the foundations are strong.
High-cap altcoins are showing solid on-chain usage, while speculative activity is starting to wane, creating a divergence that could lead to a full-blown “L1 season,” with Layer 1 networks finally taking the spotlight.
Final thoughts
- Despite altcoins underperforming Bitcoin in 2025, on-chain activity shows strong fundamentals, pointing to a difference between speculation and usage.
- With high-cap altcoins showing solid network activity, 2026 could be defined by a full-fledged Layer 1 season.