$BTC fell 3%, while altcoins dropped 14% on average: this isn’t a pullback—it’s liquidity drying up
Last week’s data from 10x Research was striking:
Of the 141 coins tracked, the average was down 14% last week, while $BTC fell only about 3%.
The Altcoin Index’s 30-day reading plunged straight from above 75 at the end of September to 32.
Bitcoin dominance rebounded to 60.7%, its highest level since the end of May.
Altcoins are weak, and the root cause is liquidity:
- Stablecoin reserves on exchanges are down to just $57.4 billion, from $78 billion last November. Real money is flowing out.
- U.S. spot Bitcoin ETFs have seen net outflows for two consecutive weeks, with another $228 million flowing out last week.
- Glassnode: risk aversion in U.S. equities is spilling over into crypto. Altcoins broadly fell by more than 5% again last weekend.
My take:
$BTC $ETH holding up relatively well is defensive positioning, not new money coming in. This sell-off is hitting the most vulnerable layer of the altcoin market. Don’t be fooled by the idea that “after falling so much, it’s cheap”—without liquidity, an oversold market can keep falling.
Three rules I’m setting for myself:
1. Until the Altcoin Index climbs back above 60 on a 90-day basis and Bitcoin dominance falls below 58%, I’ll keep my holdings to just $BTC $ETH .
2. No talk of a reversal until Bitcoin holds above $83,000–$85,000.
3. If I’m really itching to trade altcoins, I’ll wait until stablecoin reserves stop falling and start recovering.
Last week’s data from 10x Research was striking:
Of the 141 coins tracked, the average was down 14% last week, while $BTC fell only about 3%.
The Altcoin Index’s 30-day reading plunged straight from above 75 at the end of September to 32.
Bitcoin dominance rebounded to 60.7%, its highest level since the end of May.
Altcoins are weak, and the root cause is liquidity:
- Stablecoin reserves on exchanges are down to just $57.4 billion, from $78 billion last November. Real money is flowing out.
- U.S. spot Bitcoin ETFs have seen net outflows for two consecutive weeks, with another $228 million flowing out last week.
- Glassnode: risk aversion in U.S. equities is spilling over into crypto. Altcoins broadly fell by more than 5% again last weekend.
My take:
$BTC $ETH holding up relatively well is defensive positioning, not new money coming in. This sell-off is hitting the most vulnerable layer of the altcoin market. Don’t be fooled by the idea that “after falling so much, it’s cheap”—without liquidity, an oversold market can keep falling.
Three rules I’m setting for myself:
1. Until the Altcoin Index climbs back above 60 on a 90-day basis and Bitcoin dominance falls below 58%, I’ll keep my holdings to just $BTC $ETH .
2. No talk of a reversal until Bitcoin holds above $83,000–$85,000.
3. If I’m really itching to trade altcoins, I’ll wait until stablecoin reserves stop falling and start recovering.