CryptoQuant Data Shows Altcoin Weakness Now Worse Than FTX Aftermath

Highlights:

• Altcoin weakness has reached its deepest level this cycle, with 38% of tokens near historic lows.
• Gold above $5,000 and rising Iran tensions pushed investors away from risk assets.
• Bitcoin held above $65,000, while altcoins recorded sharper losses and heavy liquidations.

CryptoQuant data shows that 38% of altcoins now trade near their lowest historical prices. The figure marks the highest level recorded during this market cycle. After the FTX collapse, the metric reached 37.8%. In April last year, the level stood at 35%.

CryptoQuant contributor Darkfost published the data in a recent market update. He said liquidity conditions remain weak across risk assets. He linked the altcoin decline to a broader pullback in speculative exposure. “The overall environment remains unfavorable for risk-taking, and the first sector to bear the consequences is the cryptocurrency market, particularly altcoins,” Darkfost wrote.

Altcoins posted larger percentage declines than Bitcoin during the recent volatility. Order books across smaller tokens thinned as selling increased. Several mid-cap tokens returned to price levels last seen during prior market stress.

Trading volumes across altcoins have slowed in recent weeks. On-chain data shows fewer active wallets interacting with decentralized applications. Decentralized exchange activity has also declined. These metrics reflect reduced participation in the altcoin segment. The 38% reading now exceeds every previous drawdown recorded in this cycle. The data places the current regression above the FTX aftermath. It also places the downturn above the April correction.

Safe-Haven Demand Grows as Gold Surges and Middle East Tensions Rise

Geopolitical tensions intensified over the weekend after military strikes involving Israel and Iran. The markets reacted across commodities and equities. In addition, investors shifted capital toward defensive assets.

Meanwhile, gold climbed above $5,400 this week amid rising demand. Oil prices have also moved higher amid concerns around the Strait of Hormuz. Energy supply risks have added pressure to global markets.

Bitcoin reacted to the latest geopolitical developments. The price dropped toward $63,000 before rebounding above $65,000. The move triggered more than $300 million in liquidations across crypto futures markets. Altcoins recorded steeper percentage losses during the same period. Several tokens fell sharply as leveraged positions unwound. Futures funding rates adjusted as traders reduced exposure.

Investors have also rotated capital into traditional markets. Some funds increased exposure to commodities and large-cap equities. Crypto allocations declined during the period of heightened uncertainty.

Analysts Diverge on Bitcoin as Altcoin Weakness Deepens

CoinMarketCap’s Altcoin Season Index reads 36 as of press time. The index measures whether altcoins outperform Bitcoin over a set period. A reading below 50 signals Bitcoin dominance. Bitcoin has held above $65,000 following the recent volatility. The coin is currently trading at $67,380, a 1.56% increase in the past day. Its trading volume is up 37.48% to $57.06 billion, while the market cap stands at $1.34 trillion.

Despite the pressure on smaller tokens, some analysts see resilience in Bitcoin’s structure. Crypto analyst Michaël van de Poppe pointed to strong support above $65,000. He observed that Bitcoin rallied toward range resistance and consolidated for several weeks. He argued that this consolidation could build momentum for a breakout. Poppe predicts that the coin might rally to the $75-80K region in March.

This outlook contrasts with the weakness visible across altcoins. If Bitcoin advances while altcoins remain pinned near historic lows, divergence could shape the quarter. For now, altcoin weakness remains the dominant force across the broader crypto market.