Altcoin market capitalization (TOTAL2) remained under $1 trillion in February, whereas market sentiment fell to its most excessive stage in years. Many traders anticipate altcoins to kind a backside quickly after 5 consecutive months of decline.
The primary quarter of 2026 should still supply alternatives. Nonetheless, traders want goal alerts to judge the broader image.
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Persistent Promoting Stress and Fragmented Liquidity Weigh on Altcoins
A report from CryptoQuant states that promoting stress on altcoins (excluding BTC and ETH) has reached its most excessive stage in 5 years.
Cumulative purchase/promote delta knowledge has reached -$209 billion over the previous 13 months. In January 2025, this delta was almost zero, which mirrored balanced provide and demand. Since then, it has continued to say no with none reversal.
Cumulative Purchase/Promote Quote Quantity Distinction for Altcoin. Supply: CryptoQuant.
This excessive situation differs utterly from the 2022 bear market. Throughout 2022–2023, promoting stress slowed, permitting the market to enter a sideways part earlier than recovering. That slowdown has not occurred within the present cycle.
“This is not a dip. It’s 13 months of continuous net selling on CEX spot. -209B doesn’t mean bottom. It means buyers are gone,” analyst IT Tech said.
Moreover, derivatives knowledge can present extra short-term insights. Merchants are at present holding considerably extra lengthy positions in Bitcoin than in altcoins, as mirrored in Alphractal’s Lengthy/Quick Ratio knowledge.
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The chart exhibits that that is the primary time in historical past that Bitcoin’s lengthy ratio has remained above the altcoin common for 4 consecutive months. This means that short-term merchants have decreased their publicity to altcoins and that expectations for altcoin volatility have weakened.
As well as, the full altcoin market capitalization has dropped again to ranges 5 years in the past, under $1 trillion. The altcoin analytics account OverDose identified that the most important distinction lies within the variety of tokens. 5 years in the past, solely about 430,000 cash had been listed. Presently, that determine has surged to 31.8 million, a rise of roughly 70 instances.
Too many tokens are competing for a market “pie” that has not grown bigger. This dynamic makes restoration extra fragile and threatens the survival of low-cap tokens.
Excluding the highest 10, the remaining market capitalization stands at lower than $200 billion. The technical construction exhibits a head-and-shoulders sample, and this capitalization is shifting towards its neckline help. Analyst Pentoshi commented that even when altcoins rebound, the good points will probably not be substantial.
“Even if alts bounce here, it likely won’t be substantial. I think eventually they make new lows… Imo it’s going to take some time to work through,” analyst Pentoshi predicted.
Based on CoinGecko analysis, 53.2% of all cryptocurrencies listed on GeckoTerminal had failed by the tip of 2025. In 2025 alone, 11.6 million tokens collapsed.
The present bear market might completely reshape how traders allocate capital inside the altcoin sector. Market contributors might turn out to be extra selective, prioritize liquidity and fundamentals, and scale back publicity to speculative low-cap belongings.
