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Altcoin season was widely anticipated for 2025, but the reality has unfolded very differently. Instead of a broad-based rally, most altcoins suffered deep and prolonged drawdowns, erasing years of gains and forcing many investors out of the market.
As 2026 approaches, sentiment around altcoins remains fragile. A growing number of analysts now warn that the worst may not be over, arguing that structural weakness, declining liquidity, and fading retail participation could drive another leg lower across the sector.
Market data reinforces this cautious outlook. The Crypto Total Market Cap, excluding the top 10 assets — commonly referred to as the OTHERS index — has collapsed by more than 50% since December 2024. Market capitalization has fallen from roughly $451 billion to around $182 billion in just twelve months, highlighting the scale of capital destruction across mid- and small-cap tokens.
This sharp contraction reflects aggressive de-risking, weak demand, and sustained selling pressure across the altcoin market.
However, not all analysts are convinced the altcoin cycle is finished. A smaller group points to historical precedents, arguing that periods of extreme underperformance and investor capitulation have often preceded powerful altcoin recoveries. From this perspective, 2026 could mark the delayed arrival of an altcoin season — if liquidity conditions improve and capital rotation resumes.
A recent CryptoQuant report challenges the widely held belief that this cycle has produced “no altcoin season.” According to the data, centralized exchange trading volume for altcoins — excluding the top five assets — has reached levels significantly higher than those seen in previous market cycles. In other words, altcoins are being traded more actively than ever, even as prices remain deeply depressed across much of the market.
This divergence between volume and price helps explain the prevailing confusion. While many tokens have lost a substantial portion of their value, on-chain and exchange data show that activity has not disappeared. Instead, the market has undergone a structural shift.
Retail participation has largely faded after months of losses, with many smaller investors capitulating and exiting positions. Their absence, however, has not resulted in lower overall trading activity.
CryptoQuant’s analysis suggests that altcoin dominance has increasingly concentrated among larger players. Whales and professional participants now account for a growing share of altcoin volume, using periods of low liquidity and weak sentiment to accumulate positions or actively rotate capital.
From this perspective, the current phase may not signal the absence of an altcoin cycle, but rather its transformation. If whale-driven positioning continues and broader market conditions improve, these participants are likely to push prices higher to maximize returns.
