Altcoins have endured a pronounced stretch of selling pressure, with net selling totaling about $209 billion since January 2025, underscoring one of the steepest declines in speculative demand this cycle. On major exchanges, activity in the altcoin space has cooled markedly; data indicates a roughly 50% drop in altcoin trading volumes on Binance since late 2025, even as Bitcoin’s presence in the order book has grown. In this environment, market participants appear to be prioritizing the flagship asset, with capital gravitating toward Bitcoin during a sustained downtrend. The shift aligns with broader trends in the crypto market, including rising reliance on dollar-denominated assets as macro headwinds persist.
Key takeaways
- Altcoin net demand, excluding the leading crypto assets, shows a cumulative delta of -$209 billion since January 2025, signaling a persistent withdrawal of spot buyers and highlighting that this metric, while informative about demand balance, does not by itself mark a market bottom.
- On Binance, altcoin spot volumes have collapsed by about 50% since November 2025, while Bitcoin’s share of total exchange volume rose to 36.8% on February 7, with altcoins slipping to 33.6% by mid-February from a peak of 59.2% in November.
- Analysts point to repeated rotations into Bitcoin during corrective phases, with Darkfost noting similar patterns in April 2025, August 2024, and October 2022, when investor capital consolidated into BTC amid drawdowns for risk assets.
- Tether dominance has climbed to an all-time-like level on a weekly basis, hovering near 8% (USDT), a condition historically associated with capital shifting into dollar-pegged assets rather than tokens like BTC or ETH. Prior cycles show that declines in this metric have sometimes preceded renewed upside for Bitcoin.
- The combination of waning altcoin demand and rising stablecoin dominance suggests a risk-off environment where traders favor BTC and stablecoins as macro uncertainties persist and the market absorbs potential regulatory and macro signals.
Tickers mentioned: $BTC, $ETH, $USDT
Sentiment: Bearish
Market context: The current environment shows a clear preference for liquidity and safety over speculative bets on altcoins. With altcoin demand contracting and stablecoin dominance rising, the market signals a reduction in risk appetite as Bitcoin consolidates amid macro headwinds and evolving regulatory considerations. The shift mirrors past cycles where capital moved toward the flagship cryptocurrency as risk-off conditions intensified.
Why it matters
The observed rotation away from altcoins toward Bitcoin and stablecoins has meaningful implications for investors, developers, and market structure. For traders, the data underscores the importance of monitoring liquidity flows and the relative strength of Bitcoin during downturns, rather than simply chasing uncorrelated altcoin narratives. For ecosystem builders, sustained declines in altcoin demand could influence funding dynamics, token performance, and the pace of new project launches, as capital allocations recalibrate in a more risk-off posture. For the broader market, a prolonged shift toward BTC and dollar-pegged assets may affect liquidity distribution, derivatives pricing, and the timing of potential recoveries, making risk controls and diversification more critical in volatile environments.
The trend also emphasizes the value of watching market signals rather than price action alone. While Bitcoin’s price movements remain central to risk sentiment, the degree to which altcoins capitulate or stabilize can shape the pace and breadth of any eventual recovery. In this context, market participants are paying close attention to on-chain and exchange-level indicators, seeking any early signs that a shift in appetite could re-emerge as macro conditions evolve.
What to watch next
- Monitor the pace of altcoin net selling versus BTC-driven inflows to determine whether the current distribution begins to reverse or persists through the next leg of the cycle.
- Track USDT dominance around the 8% level and any moves away from this regime, as shifts could foreshadow changes in risk sentiment and liquidity allocation.
- Observe Bitcoin’s price and volume dynamics for signs of renewed strength or further consolidation near bear-market levels, particularly in relation to market-wide risk-off moves.
- Watch Binance and other major exchanges for changes in altcoin and BTC share of total volume, which can reveal evolving trader preferences during downturns.
- Stay alert for macro or regulatory catalysts that could alter the flow of capital between BTC, ETH, and dollar-pegged assets, potentially reshaping the near-term trajectory for altcoins.
Sources & verification
- CryptoQuant, Altcoin sell-pressure just hit a 5-year extreme — https://cryptoquant.com/insights/quicktake/6994dc07312550148f4ebe22-Altcoin-sell-pressure-just-hit-a-5-year-extreme
- CryptoQuant, Altcoin volumes shrink by 50% as capital rotates back to Bitcoin — https://cryptoquant.com/insights/quicktake/69958a88c876a02133a047bb-Altcoin-volumes-shrink-by-50-as-capital-rotates-back-to-Bitcoin
- TradingView, USDT.D chart data — https://in.tradingview.com/symbols/USDT.D/
- Cointelegraph, New Bitcoin whales are trapped underwater, but for how long? — https://cointelegraph.com/news/new-bitcoin-whales-are-trapped-underwater-but-for-how-long
- Cointelegraph, Wells Fargo tax refunds YOLO trade driving Bitcoin and risk assets — https://cointelegraph.com/news/wells-fargo-tax-refunds-yolo-trade-bitcoin-stocks-150b
Altcoin demand wanes as capital rotates back to Bitcoin and stablecoins rise
Bitcoin (CRYPTO: BTC) activity began to draw a larger slice of total exchange volume as altcoins retrenched, a trend reinforced by the wider market’s risk-off posture. While the market previously witnessed heightened attention to altcoins during bullish phases, the latest data show a clear tilt away from the broader altcoin complex toward the flagship asset. The shifts in volume and demand are not only a reflection of price moves but a signal of how market participants are prioritizing liquidity and safety in uncertain times.
Ether (CRYPTO: ETH) and other altcoins have experienced a decline in both trading interest and net demand, with the combined effect being a tight supply of buyers in the spot market. This is not a simple bottom indicator; rather, it reflects a fundamental reallocation of capital, where risk-on bets in lesser-known tokens give way to a more conservative stance. The data from centralized exchanges shows a persistent exodus from altcoin markets over the past year, with the most pronounced outflows occurring in the current downcycle, as traders reassess risk and position for potential macro triggers.
At the same time, the dominance of dollar-pegged assets remains elevated. USDT, a primary stablecoin, has reached levels reminiscent of prior multi-month highs, a condition that typically accompanies a preference for liquidity and ready-to-deploy capital in times of uncertainty. The dynamic has historically been associated with a cautious stance among traders, as they seek to preserve value while awaiting clearer directional cues from macro data, regulatory updates, or shifts in market sentiment.
In this context, the market has shown a pattern of capital rotations: investors move money into Bitcoin amid broad market weakness, then re-evaluate altcoin exposure as conditions stabilize. While such rotations do not guarantee a resumption of altcoin strength, they set the stage for potential re-entry if liquidity returns and risk appetite improves. The ongoing narrative emphasizes the intertwined nature of liquidity, risk sentiment, and asset selection within the crypto market, with Bitcoin acting as a focal point for funding during downturns and stablecoins serving as a practical store of value and liquidity during periods of uncertainty.