In the past year, the anticipated altcoin market did not materialize as expected. In previous cycles, Bitcoin's rise typically led to capital outflow and gradually spread to the altcoin sector. However, in this round, this transmission mechanism has clearly weakened. Retail participation remains low, with many projects lacking new narratives strong enough to drive the market and failing to provide solutions with real application value. At the same time, the continued reduction in holdings by early investors and the new supply from token unlockings are constantly putting pressure on the market. Against this backdrop, altcoins continue to face pressure, and investor sentiment is generally frustrated. However, there are still varieties in the market that have strengthened during certain phases, and such opportunities can often be identified through some market structure signals.

Continuous Supply Pressure: Limited Upward Momentum for Altcoins

Since October 2025, while Bitcoin has seen periodic corrections, its market dominance has not significantly declined, and recently it has rebounded. This market trend appears to be Bitcoin-dominant, with altcoins following in a phased rise. Meanwhile, an increasing number of companies adopting treasury management strategies continue to accumulate Bitcoin, keeping its structural demand stable.

In contrast, altcoins are facing a more pronounced supply pressure. Continuous release of tokens by early investors, coupled with new circulating supply from token unlockings, has frequently limited the market's rebound due to selling pressure. Since August 2024, about $99 billion worth of tokens have been unlocked and entered circulation, bringing continuous supply shocks to the market.

As retail investor enthusiasm has cooled, the impact from the supply side has gradually become the key variable driving price movements. This also explains why in the bull market from 2024 to 2025, altcoins not only underperformed Bitcoin but also their overall market value failed to reach the peak of this cycle.

Unlocking Windows and Market Structure: Phased Rebounds Still Possible

Historical experience shows that large-scale token unlockings often improve market liquidity in the short term and boost trading activity. In many cases, altcoins experience phased rebounds before and after unlocking windows, which includes both enhanced absorption capacity from increased trading volumes and a reallocation of funds within the sector.

Next week, an estimated $4.7 billion worth of tokens are expected to be unlocked, making it the third-largest unlocking week since August 2024. Historical data indicates that during similar-sized unlocking windows, the crypto market often sees rebounds in the weeks leading up to the unlocking, while the overall market cap peaks shortly after unlocking.

However, this rebound seems to have started about a week earlier, suggesting that its impact may be weaker than in previous instances. The current round of unlocking is primarily concentrated among a few protocols, most of which come from the platform token WhiteBIT Coin of the European crypto exchange WhiteBIT. Although this token has a fully diluted valuation (FDV) of approximately $16.6 billion, its average daily trading volume is only about $74 million, indicating that its relatively limited trading scale could disproportionately affect price fluctuations.

Comprehensively considering historical experience, a practical market indicator is the deviation of the total market value of altcoins relative to the 90-day moving average. When the total market value exceeds the 90-day average by more than 50%, the market typically enters a phase of overheating; conversely, when it is about 30% below the 90-day average, tactical rebounds are more likely to occur. The current market structure indicates that the selling pressure on altcoins may be gradually approaching a state of excessive release.

Overall, the altcoin market is at a critical stage. Structurally, the sector still faces dual pressures: on one hand, retail demand is overall weak, and on the other hand, token unlocks and sell-offs by early investors continue to pressure the supply side. This structural characteristic significantly weakens the traditional transmission path of “Bitcoin's rise driving altcoins' subsequent gains” in this cycle.

The above opinions are derived from Matrix on Target, Contact Us to obtain the complete report on Matrix on Target.

Disclaimer: The market is risky, and investments should be cautious. This article does not constitute investment advice. Trading in digital assets can involve significant risks and volatility. Investment decisions should be made after carefully considering personal circumstances and consulting financial professionals. Matrixport is not responsible for any investment decision based on the information provided in this content.

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