Altcoin Market Defends Key Support – Is a Breakout Rally Next?

TLDR

• The Crypto Fear and Greed Index reached “neutral” at 40 for the first time since October 2025, improving from “extreme fear” levels
• Bitcoin crashed 35% from its all-time high above $125,000 to $80,000 in October 2025, with altcoins losing even more value
• Bitcoin stayed resilient following the US strike on Venezuela, maintaining prices above $91,000 despite typical risk-asset volatility
• The total altcoin market cap (Total3) holds above $879 billion, maintaining support at $784 billion after hitting $1.2 trillion in October
• Over 29 million crypto tokens now exist on CoinMarketCap, with analysts citing market saturation and crypto ETFs as reasons altseason hasn’t materialized

The crypto market is showing signs of recovery as investor sentiment climbs out of fear territory. The CoinMarketCap Crypto Fear and Greed Index hit 40 on Sunday, marking neutral sentiment for the first time since October 2025.

This represents a major shift from the extreme fear that gripped markets at the end of 2025. The index had bottomed out at 10 in November, indicating extreme fear among investors.

The sentiment collapse began with a historic market crash in October 2025. Bitcoin had reached an all-time high above $125,000 on Coinbase just days before the crash.

The leading cryptocurrency then plummeted to around $80,000, a 35% decline. Altcoins suffered worse losses, with many tokens losing the majority of their value overnight.

The total altcoin market cap, excluding Bitcoin and Ethereum, dropped 33% in a single day. This crash derailed what many thought would be a continued bull run.

Despite the improving sentiment, challenges remain for crypto markets in 2026. Growing geopolitical tensions and a lack of retail investor interest could create obstacles.

Market Holds Steady After Venezuela Strike

Bitcoin demonstrated unusual resilience following the US strike on Venezuela on Saturday. President Trump announced the successful large-scale strike and the capture of Venezuelan President Nicolas Maduro.

Typically, risk-on assets like cryptocurrencies see sharp declines during geopolitical events. However, Bitcoin maintained stability and even reclaimed the $91,000 price level.

Market analysts are divided on the impact of this event. Some believe it will have little effect on Bitcoin’s price going forward.

Others say investors need to wait for traditional financial markets to open on Monday. The reaction of US stock markets could provide direction for crypto prices.

Altcoin Market Shows Technical Strength

The altcoin market currently sits at over $879 billion in total market capitalization. Crypto analyst Michaël van de Poppe says altcoins are positioned for their next major move upward.

The Total3 market cap, which tracks all crypto tokens except Bitcoin and Ethereum, is holding above $784 billion. This level represents critical support formed during the October crash.

Van de Poppe notes the Total3 is moving back toward its 365-day moving average. In October, this metric hit an all-time high near $1.2 trillion before the crash.

Investors are watching closely for signs of the next altseason. This refers to periods when altcoins see sustained price increases.

However, 2025 proved disappointing for altcoin investors. The expected rotation from Bitcoin into altcoins never materialized as in previous cycles.

Bitcoin’s yearly candle closed red in 2025, marking the first time this happened in a post-halving year. This development invalidated the four-year cycle theory many traders relied on.

The crypto landscape has changed dramatically with market saturation. CoinMarketCap now tracks over 29 million listed coins, all competing for limited investor capital.

Analysts point to this proliferation as a key factor preventing altseason. With too many tokens available, investor capital gets spread thin across the market.

The launch of crypto exchange-traded funds also altered market dynamics. ETFs create liquidity silos that keep funds locked rather than flowing freely through the crypto ecosystem.

This structure prevents capital from Bitcoin or other tokens from rotating into altcoins. The traditional altseason phase that crypto traders expected has been dampened by these new market structures.

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