Key Takeaways
Altcoins face rising sell pressure as Bitcoin decouples and dominates liquidity. With only 17 outperformers, indicators suggest a potential correction, unless ETH/BTC strength sparks renewed rotation into altcoins.
The broader crypto market took a noticeable hit over the past day, dropping $60 billion after reaching a peak of $3.92 trillion. At press time, it sat at $3.86 trillion in total market cap, according to CoinMarketCap.
This decline quietly signals a crucial trend: altcoins are steadily recording capital outflow. That shift could cause a significant drop.
AMBCrypto has identified key indicators that may point to such a move.
Bitcoin–altcoin decoupling intensifies
Data from the Alphractal Correlation Heatmap—which tracks how closely altcoins move relative to Bitcoin [BTC]—shows a sharp shift, suggesting further downside potential.
At the time of analysis, the correlation metric was nearing zero, indicating a growing decoupling between Bitcoin and altcoin pairs.
Historically, such a divergence has preceded broad market corrections for altcoins.
Source: Alphractal
This trend implies that only a handful of cryptocurrencies may remain in the green, with marginal gains, while most altcoins could face heightened volatility.
Moreover, the analysis also suggests that the current underperformance of altcoins could allow Bitcoin to set the stage for a broader directional shift.
Altseason: Good for Bitcoin, bad for the market
Altseason refers to a period when altcoins attract the bulk of market liquidity, often posting strong gains.
However, the Altseason Index—a tool that tracks this trend— showed that only 17 altcoins had outperformed Bitcoin, a press time, over the past 60 days.
This low count suggests that a true altseason has yet to begin, as liquidity remains concentrated in a limited number of assets. Such a setup could trigger a rotation back into Bitcoin.
Source: Alphractal
If this rotation happens, the market could mimic recent price action, where altcoin performance (blue line) surged briefly, only to fall back into the green zone, commonly referred to as Bitcoin season.
The Alpha Quant Signal also reinforces the bearish outlook for altcoins as it flashes a sell signal on the chart.
Historical data shows that each time this yellow line appears, it has preceded a market decline, as seen in five previous scenarios.
Source: Alphractal
If this pattern holds, the likelihood of a sustained altcoin rally appears slim. Even the 17 outperforming tokens could struggle, with the broader altcoin market likely absorbing the biggest hit.
Keep an eye on this
While multiple altcoin indicators point to an incoming sell-off, the ETH/BTC chart currently suggests a potential rally remains in play.
Typically, when this chart trends upward—as it is at press time—it signals ongoing capital rotation from Bitcoin into Ethereum and other altcoins.
If the ETH/BTC pair continues to rise, altcoins may still have room to rally.
Source: TradingView
However, any shift lower in this chart would likely confirm the final leg of a broader altcoin sell-off.
