The altcoin market capitalization has suffered a 15% drop in October, and recent data suggests the downturn may intensify before the month ends. This decline is driven by increasing sell pressure and diminishing demand from traders.
Bearish Indicators Point to Deeper Decline
Several on-chain metrics highlight the growing risk for altcoins:
- Surge in Altcoin Inflows: The 7-day average of altcoin inflow transactions to exchanges has hit a new year-to-date high, surpassing 70,000. Historically, similar spikes have coincided with significant price drops for both Bitcoin and altcoins, signaling a rise in immediate selling pressure or preparation for major asset rotation.
- Weak Stablecoin Inflows: Data shows that Stablecoin CEX Flow (potential buying power) has sharply decreased since mid-September and is approaching zero. This lack of capital moving onto exchanges, combined with a surge in altcoin supply, creates an imbalance that amplifies potential downside pressure.
- Rising USDT Dominance: The USDT.D index has risen above 5%. This increase in Tether's dominance suggests that stablecoins are not being actively deployed to buy altcoins. This pattern has historically aligned with sharp altcoin declines, indicating that recent liquidation events have pushed liquidity out of the market.
Search for a Potential Bottom
Despite the overwhelmingly bearish short-term signals, some technical analysis suggests the market may be nearing a turning point:
- MACD Cycle Bottom Signal: Technical analyst Merlijn points to a rare MACD cross signal that has only appeared three times in the last eight years. Historically, this signal has marked the start of an altcoin supercycle and subsequent strong rallies.
In summary, while bearish on-chain data and a drop in buying power suggest that altcoins face severe immediate headwinds and may struggle to recover quickly, a rare technical indicator offers a glimpse of a potential long-term cycle bottom. Investors must carefully balance this cautious short-term outlook with the historical significance of the technical buy signal as October progresses.
October 2025, Cryptoniteuae