Ethereum – Institutions scoop up $946M, but watch THIS metric for a shakeout!
- Altcoins have lost over $350 billion since December, driven by liquidity stress and tariff fears.
- A brief bounce offered relief, but structural risks and weak inflows kept altcoins in a defensive mode.
The altcoin market is under pressure. Since peaking at $1 trillion in December 2024, it has shed more than 40% of its value, plunging to $583 billion in a matter of months.
This sharp contraction isn’t isolated — it reflects deepening liquidity concerns and renewed investor caution as Donald Trump’s aggressive tariff stance begins to ripple through risk-on assets, including cryptocurrencies.
Altcoin contraction — a breakdown
The altcoin market has shed over $350 billion since its $1 trillion peak in December, now hovering around $583 billion.
The drop, captured by Glassnode’s altseason chart, reveals a synchronized unwinding across tokens – regardless of sector or theme.
The steep divergence between the 7-day and 30-day SMAs flags a breakdown in market structure, with condition 2 signaling the end of altseason momentum.
Source: Glassnode
Unlike majors like Bitcoin [BTC] or Ethereum [ETH], altcoins occupy the outer edge of the risk curve — meaning they’re the first to bleed in liquidity shocks.
Trump’s tariff announcement acted as a catalyst, exposing the fragility of conviction among altcoin holders. Though the 7-day SMA is curling slightly, it remains premature to call this a durable recovery.
A short-term reprieve?
In the past 12–18 hours, altcoins have shown a modest rebound, led by Chianlink[LINK], Solana[SOL], and Cardano[ADA]. This synchronized recovery comes after several days of sharp declines.
However, the uptick appears to be more of a relief rally than the beginning of a lasting structural recovery.
The sudden spike seems reactionary, driven by oversold conditions and short-term positioning rather than new capital inflows or renewed confidence in the market.
Source: TradingView
Despite recent gains, the market remains fragile. Ethereum, for example, has shown little movement, highlighting the lack of leadership from major assets. Liquidity remains limited, and volatility is still high, leaving this rally susceptible to a reversal.
While sentiment appears to be stabilizing slightly, the broader trend of risk-off behavior in altcoins persists. A sustained recovery will require consistent volume support and a rotation from major assets. Until then, the market is likely to stay in a defensive posture.
Why altcoins remain vulnerable
Altcoins remain on the fringes of the risk curve, with structural challenges becoming increasingly apparent. Capital is flowing into major assets like Bitcoin or retreating to the safety of stablecoins, leaving limited inflows to support the broader altcoin market.
Ethereum’s lackluster performance, with only a 1.99% gain while others experienced brief spikes, underscores the continued caution in risk appetite. Many altcoins have MVRV ratios still in negative territory, indicating that holders are sitting on losses and hesitant to reinvest.
Furthermore, the ETH/BTC pair remains near local lows, suggesting Ethereum is losing ground to Bitcoin—an indicator of conservative capital allocation.
Without renewed rotation down the curve, altcoins are likely to stay reactive rather than demonstrating resilience.
