Altcoin Season Setup: CEX Volume Reaches New Highs Despite Price Struggles

The anticipated altcoin season for 2025 has not materialized as expected, leading to significant losses for many altcoins, with market sentiment remaining fragile as we approach 2026. While some analysts are warning of further declines due to structural weaknesses, others suggest an eventual recovery might be on the horizon. Recent trading data indicates increased activity among altcoins, hinting at a possible shift in market dynamics.

Key Takeaways

The long-anticipated altcoin season for 2025 has been disappointing, causing substantial losses across the sector.
The Crypto Total Market Cap, excluding top assets, has plummeted by over 50% since December 2024.
Despite the downturn, increased trading volume on centralized exchanges could indicate that the altcoin market is in a transitional phase rather than a complete downturn.
A significant shift in trading dynamics, with major players or "whales" becoming more influential, suggests a potential reconfiguration of altcoin strategies.
The OTHERS chart highlights persistent market compression, with the need for recovery above key moving averages before a true altcoin season can be declared.

Altcoin Season Setup: CEX Volume Hits Cycle Highs Despite Price Weakness

Main Content

The long-awaited altcoin season was expected to begin in 2025, but the reality turned out to be quite different. Instead of a widespread rally, numerous altcoins faced significant and extended declines, wiping out years of gains and pushing many investors out of the market.

As we near 2026, altcoin sentiment remains delicate. An increasing number of analysts are now cautioning that the worst may still lie ahead. They argue that ongoing issues like structural weakness, reduced liquidity, and dwindling retail interest might lead to another downturn across the altcoin sector.

Market data supports this cautious outlook. The Crypto Total Market Cap, particularly the OTHERS index, which excludes the top ten assets, has dropped more than 50% since December 2024. This decline has seen market capitalization decrease from around $451 billion to about $182 billion in just one year, emphasizing the extent of the capital loss among smaller and mid-cap tokens.

This sharp market contraction indicates aggressive de-risking, diminishing demand, and lasting selling pressure within the altcoin sphere.

However, not all analysts believe that the altcoin cycle has come to an end. A smaller faction points to historical trends, suggesting that extreme underperformance and investor capitulation have often preceded robust recoveries in altcoins. From this angle, 2026 might be the year we finally see the arrival of an altcoin season—assuming that liquidity improves and capital rotation resumes.

A recent report from CryptoQuant challenges the notion that this cycle has seen "no altcoin season." The data reveals that centralized exchange trading volume for altcoins—excluding the top five assets—has surged to levels far exceeding those from earlier market cycles. This suggests that altcoins are experiencing increased trading activity, notwithstanding the widespread price depreciation.

CEX Volume Ratio: Others vs. Top 5 | Source: CryptoQuant

This disparity between trading volume and prices sheds light on the current confusion in the market. While many tokens have lost significant value, data from on-chain and exchanges show that trading activity still persists. Instead, the market seems to be undergoing a structural transformation.

After months of losses, retail investors have largely faded from the scene, with many smaller traders opting to capitulate and exit their positions. Interestingly, this absence has not resulted in reduced overall trading activity.

Analysis from CryptoQuant suggests that dominance in the altcoin market is shifting more towards larger participants. Whales and professional investors are increasingly taking a larger stake in altcoin trading, using lower liquidity periods and subdued sentiment to accumulate their positions or rotate capital actively.

From this viewpoint, the current state of the market may not imply an absence of an altcoin cycle but rather its evolution. If the trend of whale involvement continues and market conditions improve, these larger players could help drive prices upward to maximize their returns.

OTHERS Market Cap Shows Prolonged Compression

The OTHERS chart, which illustrates the total cryptocurrency market capitalization minus the top ten assets, reveals the depth and duration of the ongoing altcoin correction. After hitting near $450 billion in late 2024, the market has shed more than 50% of its value, stabilizing around the $200–210 billion range. This significant drop indicates that the altcoin market has undergone a comprehensive reset rather than a mere pullback.

Altcoin market cap testing critical demand around weekly-200 MA | Source: OTHERS chart on TradingView

From a technical standpoint, the market structure exhibits extended compression. Prices are fluctuating around the 200-week moving average (red), a level that has historically served as a long-term balancing point during shifts between bearish and recovery phases. The inability to reclaim the 100-week and 50-week moving averages indicates that upward momentum remains feeble and that buyers lack confidence at elevated levels.

The dynamics of trading volume further bolster this perspective. While momentary spikes are evident during sell-offs and relief rallies, there is no sustained volume growth suggesting broad-based accumulation. This points to selective positioning as opposed to widespread risk appetite.

Importantly, the market is no longer making significantly lower lows, suggesting that forced selling may have mostly run its course. However, the failure to form higher highs keeps the market outlook neutral to bearish. For a meaningful altcoin recovery to occur, the OTHERS index needs to reclaim the $260–280 billion range and maintain stability above key moving averages.

Until that happens, the chart indicates continued consolidation, dominance by larger market players, and a market still in search of a reliable bottom instead of the onset of a classic altcoin season.

Featured image from ChatGPT, chart from TradingView.com