Bitcoins surge has paused as traders engaged in profit-taking.

This triggered a pullback, which dragged the cryptocurrency near $116,000. It has since staged a recovery of nearly 2%, pushing Bitcoin above $119,000 at the time of writing.

New data has emerged, signaling that BTC is not at a local top but in a transition phase, with timing, behavior, and structure all pointing to further upside.

BTC Makes Room for Alts

According to the analytics firm, SwissBlocks latest market report, Altcoin Vector, beneath the surface, capital rotation has started, and Ethereum is emerging as the next leg of the cycle. The firm said that Bitcoin is consolidating, and not breaking down.

BTC dominance has likely peaked in the short term as capital rotation accelerates across the crypto market. The ETH/BTC ratio is also rising steadily, which is indicative of Ethereums relative strength and its ability to attract liquidity from Bitcoin while also lifting the broader altcoin complex.

This is is also driving renewed momentum in other altcoins as liquidity moves within the market rather than exiting it. This trend indicates an expansion phase where capital is redeploying into Ethereum and select altcoins, while simultaneously reducing BTCs market share.

The rotation means that confidence remains intact as investors seek higher returns beyond BTC.

BTC Hasnt Topped Yet

While Bitcoins pause has triggered rotation into Ethereum and altcoins, SwissBlock argued that the broader cycle for the worlds largest crypto itself remains unfinished.

According to BTC Vectors Optimal Signal, each major expansion in this cycle has lasted 15-30 days, while the current rally is only on day 12. With capital beginning to rotate into Ethereum, it indicates that the cycle remains incomplete.

To top that, Glassnodes Short-Term Holder Relative Unrealized Profit also remains well below levels seen during previous cycle tops in January and April 2024, which means that market participants are not exhibiting excessive profit-taking or euphoria yet.

Additionally, both Willy Woos Speculation Index and VWAP Liquidity confirm that the market is not overheated, as neither indicator has reached prior cycle extremes. These factors together suggest there is ongoing structural support for Bitcoin to move higher.