Author: ChainThink

Recently, although BTC is still in a high-range fluctuation, most altcoins have fallen back to the starting point of the tariff crisis in April, wiping out all gains. For most veteran crypto investors, the 24-25 bull market is definitely a game-changer that defies previous understanding. The long-awaited "alt season" has turned into "alt funeral." Are the low-priced altcoins still worth investing in?

The main argument is that it hasn't dropped to the bottom yet. Altcoins may not only not rise but could also accelerate a crash, completing a thorough cleansing. Next, I will explain the reasons

The fundamental environment for altcoins has changed fundamentally

Mainly due to the macro environment, the maturity of industry development, the entry point of regulatory capital, and the vast differences in the fundamentals of altcoins.

During the three major bull runs from 2010 to 2021, the global financial market was generally developing rapidly with ample liquidity, and funds were desperately seeking new concepts. Cryptocurrency, as a frontier concept, had a relatively small market capitalization compared to the tens of trillions of dollars of the US stock market and A-shares, showing terrifying growth potential.

Previously, there were very few altcoins, and many funds flowed into altcoins due to missing out on BTC.

The first round of BTC concept coins, the second round of BTC forks, and Ethereum ICOs; the third round, due to the pandemic's massive monetary easing, was the last and truest madness, with various concepts such as NFT, GAMEFI, and metaverse emerging endlessly, constructing the out-of-the-box WEB3 narrative. There were no competing products to limit its growth, similar to the internet bubble around 2000.

The number of crypto users increased from 50 million to 300 million between 2020 and 2021, an exponential growth that brought the craziest hundredfold altcoins. However, in recent years, the growth of user numbers has significantly slowed down, and ETFs and other channels have diverted a considerable amount of attention and funds. The core WEB3 narrative of the crypto market has shifted to regulated finance. In recent years, the biggest benefits have been BTC and crypto-related stocks. Funds have already found alternative substitutes for altcoins, and crypto and stablecoin-related stocks are still expected to develop at a high speed in the future.

From 2023 to 2025, besides the popularity of on-chain MEME and AI agents, and the fleeting popularity of inscriptions, altcoins have not seen any significant technological upgrades, nor have they had the abundant liquidity support from interest rate cuts, and regulation has become increasingly clear, eliminating the space for regulatory arbitrage. The period of rampant growth has ended. From project teams issuing endless tokens to enrich themselves, and ordinary users enjoying the premium of the industry's rapid growth, the market's "positive feedback loop" was flying high. Now, users have been cut, and project teams have been completely replaced by real big institutions and regulated companies. The soil for the alt season's outbreak no longer exists.

Four Pressure Points for Accelerated Crash

Decline in Liquidity Combined with Position Liquidation

Total market cap has declined, trading volume has decreased significantly, and some small-cap tokens have run out of liquidity. Even a slight selling pressure can trigger a cliff-like drop.

BTC's share has increased, and the altcoin market share has not hit bottom yet.

BTC's market cap has remained above 65% of the total crypto market cap, or even higher, hindering the attraction of altcoin capital. If its share continues to rise, the altcoin decline will further widen. Currently, the trend is returning to strength again.

Macro Policy Pressure

Global central banks may maintain a tight stance and impose tariffs, and frequent negative news from conflicts in the Middle East make funds more inclined to invest in bullish assets and safe havens—altcoins face greater risks.

Technical Potential Breakdown

Most altcoins have not built a strong support structure. Many coins have already broken through their bottom consolidation structures since 2023, reaching new lows. The two-year bottom range being broken means that the accumulated holdings above will become a historic level of strong resistance. The recovery of altcoins or accelerated adjustment may evolve into a bear market-type decline.

Basic Fundamentals Are Disastrous

Currently, there are over 17 million coins listed on CoinMarketCap, compared to just thousands in 2021, and on-chain tokens are still accelerating issuance. For these highly homogenized tokens, what reason is there to maintain a collective breakout?

Currently, 90% of altcoins, even after a sharp drop, only have technical rebound opportunities. Tokens like DEFI that can actually generate income and have good growth potential have valuation repair opportunities.

Market Analysis Viewpoints

To analyze the altcoin trends, we need to first look at the movements of BTC and ETH. It has been mentioned before that the range of 108,000-112,000 has formed a strong resistance, which is an important point of contention for funds. Even if the Genius Act passes today, the continued purchase of BTC by companies has not been able to break through 110,000. Under these circumstances, we must pay attention to the risk.

According to yesterday's analysis of the double top pattern, if BTC returns to the true major support level around 95,000 and ETH returns to around 2,200, then altcoins may experience a drop of 30-50%. At present, the author has no altcoin position and is preparing to wait further.

If BTC continues to choose a mild adjustment and washing, then we need to wait until BTC's market share falls below 60% for altcoins to have a better rebound escape opportunity.