How is the PMI index beginning of the Altcoin phase?
The decline in altcoin market capitalization began to slow down in the first week of March amid several negative geopolitical developments. In addition, the newly released PMI index is reviving hopes that altcoins may soon recover.
However, with altcoins trading volumes near their all-time lows, any recovery could face significant challenges.
Why PMI report can affect capital flows in Altcoin market?
A positive macroeconomic signal emerged, bringing renewed optimism. The US ISM manufacturing PMI has remained above the 50 mark for two consecutive months.
The ISM Manufacturing PMI reflects survey results from purchasing managers about the state of their business. It helps assess whether the US manufacturing sector is expanding or contracting.
Specifically, the February 2026 PMI reached 52.4. Although down slightly from January's 52.6, it was still ahead of the forecast of 51.8.
Historical data shows that when the ISM PMI rises above 50 – indicating economic expansion – it often coincides with strong rallies in Bitcoin and altcoins.
Analyst Ash Crypto explained that when the PMI rises above 50, the US economy will enter an expansionary phase. Increases corporate profits. Family income will improve.
Consumer spending accelerates. The appetite of investors is strengthened.
“If ISM stays above 50 for a few more months, crypto winter may be over soon,” Ash Crypto said.
Analysts expect the ISM Manufacturing PMI to remain above 50 for two consecutive months to signal the start of a new US business cycle. This environment creates favorable conditions for capital to flow into high-risk ventures such as cryptocurrencies.
Analyst Matthew Hyland combined the PMI data with historical models and pointed out that the altcoin dominance has now confirmed a breakout signal.
A rising PMI, monthly MACD-H indicator along with a recovery and an exit of a falling wedge pattern in altcoin dominance suggest the conditions of the altcoin season in 2026.
38% of Altcoins trading near all-time lows.
A recent report by CryptoQuant analysts reflects the negative outlook for altcoins.
According to CryptoQuant analyst Darkfost, approximately 38% of altcoins are trading near their all-time lows. This represents the lowest level in the current cycle and looks worse than the period following the FTX crash.
“This chart accurately reflects the current state of altcoins. Investors remain cautious and lose interest in altcoins,” Darkfost explained.
But he added that a sharp decline could create a situation where opportunities begin to emerge.
BeinCrypto's latest report highlighted further signs that altcoins could recover in March. However, the overabundance of altcoins coupled with tight liquidity conditions could limit the extent of any recovery.
