Why the Altcoin season is unlikely to start in 2026, facts
Altcoin market capitalization (TOTAL2) remained below $ 1 trillion in February, the market sentiment has increased tremendously in years. Many investors expect altcoins to bottom out soon after five straight months of decline.
The first quarter of 2026 may still offer opportunities. However, investors need concrete indicators to assess the broader picture.
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Constant selling pressure and dispersed liquidity on Altcoins
CryptoQuant reports that sales of altcoins (excluding BTC and ETH) have reached a five-year high.
Cumulative delta buy/sell data over the past 13 months has reached -$209 billion. By January 2025, this delta was close to zero, reflecting balanced supply and demand. Since then, it has continued to decline without reversal.
This dire situation is completely different from the bear market of 2022. In the year In 2022-2023, the selling pressure has eased, allowing the market to enter a sideways phase before recovering. That slowdown hasn't happened in the current cycle.
“It's not a dip. It's a 13-month streak of net sales on the CX spot. -209B doesn't mean it's down, it means buyers are gone,” said analyst IT Tech.
Additionally, derivatives data can provide additional short-term insights. Traders currently hold more long positions in Bitcoin than in altcoins, as can be seen in Alfractal's long/short ratio data.
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The chart shows that Bitcoin's long-term ratio has remained above the altcoin average for four consecutive months for the first time in history. This indicates that short-term traders have reduced their exposure to altcoins and prospects for altcoin volatility have weakened.
In addition, the total altcoin market capitalization has dropped to $1 trillion five years ago. Altcoin analytics account OverDose pointed out that the biggest difference is in the number of tokens. Five years ago, only about 430,000 coins were listed. Today, this figure has risen to 31.8 million, a nearly 70-fold increase.
Too many tokens are competing for a market “pie” that hasn't grown as big. This volatility makes recovery more fragile and threatens the survival of low-cap tokens.
With the exception of the top 10, the rest have a market capitalization of less than $200 billion. The technical structure shows a head and shoulder design, and this capitalization is going to support the neckline. Analyst Pentoshi opined that even if altcoins rebound, the gains may not be huge.
Analyst Pentoshi said: “Even if alts come out here, maybe it won't be useful, I think they will eventually bring new controversies….
According to CoinGecko research, 53.2% of all cryptocurrencies listed on GeckoTerminal will collapse by the end of 2025. 11.6 million tokens were minted in 2025 alone.
The current bear market could permanently shape how investors allocate capital in the altcoin sector. Market participants can be more selective, prioritize liquidity and fundamentals, and reduce exposure to low-value assets.
