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- Altcoins have seen over $209B in net selling pressure since 2025.
- Bitcoin and stablecoins are absorbing liquidity during the downturn.
- Market recovery may depend on falling stablecoin dominance and renewed inflows.
The crypto market is showing clear signs of capital rotation, with altcoins facing sustained selling pressure while investors increasingly favor Bitcoin and dollar-pegged assets. Since January 2025, altcoins excluding Ethereum have recorded roughly $209 billion in net selling volume — one of the sharpest contractions in speculative demand this cycle.
The trend suggests investors are prioritizing liquidity and perceived safety as market uncertainty persists.
Altcoin Liquidity Weakens Across Exchanges
Spot trading data points to a steady withdrawal of capital from alternative tokens. Analysts tracking exchange flows report that cumulative buy-sell imbalances across centralized platforms have remained deeply negative for over a year, indicating a lack of consistent spot buyers.
On Binance, trading activity reflects this shift clearly. Altcoin volumes have dropped by roughly half since November 2025, while Bitcoin’s share of total trading rose sharply. By early February, Bitcoin accounted for more than a third of exchange activity as the asset hovered near the $60,000 level.
Historically, similar patterns have emerged during market corrections, when traders consolidate positions into the most liquid assets while reducing exposure to higher-risk tokens.
Stablecoin Dominance Signals Defensive Positioning
Another key indicator of market sentiment is the growing dominance of Tether’s USDt. Stablecoin market share recently climbed toward levels last seen during extended bear-market periods.
Rising stablecoin dominance often signals that traders are parking funds on the sidelines rather than deploying capital into volatile assets. Previous cycles show that declining stablecoin dominance has frequently preceded renewed bullish momentum, as investors begin rotating back into riskier positions.
Market Structure Reflects a Risk-Off Environment
Data from analytics firms such as CryptoQuant suggests the current environment reflects caution rather than capitulation. The negative flow imbalance does not necessarily mark a market bottom, but it does indicate weak speculative appetite.
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If past patterns hold, a recovery in altcoin demand may depend on two triggers: renewed Bitcoin strength that restores confidence, or a decline in stablecoin dominance signaling fresh capital entering the market.
For now, the crypto market appears to be in a defensive phase. Capital consolidation into Bitcoin and stablecoins highlights investor caution and reduced risk tolerance. Until liquidity returns to altcoins, the broader market structure is likely to remain tilted toward stability rather than speculation.
`Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.`
I’m your translator between the financial Old World and the new frontier of crypto. After a career demystifying economics and markets, I enjoy elucidating crypto – from investment risks to earth-shaking potential. Let’s explore!
