Altcoins Prepare for $657 Million Supply Shock: Is Capital Shifting from Bitcoin?

Recent developments suggest that a significant amount of capital, totaling $657 million, is set to unlock for various altcoins. While this may initially seem challenging for the market, the timing coincides with a resurgence of risk-on sentiment among investors. This article explores the implications of these token unlocks and considers whether we might be witnessing the beginning of an altcoin season.

Key Takeaways

Over $657 million in token unlocks is scheduled.
Recent market trends indicate a risk-on sentiment, with $250 billion flowing into crypto since the start of 2026.
Historical patterns suggest that altcoin cycles often follow when ALT/BTC bottoms and breaks out.
Major token releases, particularly from Hyperliquid (HYPE), are expected to introduce significant supply into the market.
Indicators suggest potential liquidity for altcoins could increase, possibly signaling the dawn of a new altcoin cycle.

Altcoins face $657 mln supply shock: Is capital moving away from Bitcoin?

A Potential Shift: The Impact of Token Unlocks on the Market

Token unlocks can have mixed effects on the crypto marketplace. From an economic perspective, a substantial token supply can dampen market sentiment, especially in the absence of strong bid pressure. However, the upcoming $657 million token unlocks are arriving at a fascinating time.

Currently, there is a revived “risk-on” attitude in the market, with $250 billion invested since the beginning of 2026, and only 40% of this capital has gone into Bitcoin (BTC). This suggests that the ongoing rally is driven more by market dynamics rather than just Bitcoin's influence.

Altcoins
Source: TradingView (OTHERS/BTC)

But the pressing question is: Are we on the verge of a full-blown altcoin season? Historically, altcoin cycles have emerged following a bottom and breakout in the ALT/BTC ratio.

For instance, in the fourth quarter of 2016, the ALT/BTC pair saw a bottom, broke its downward trend, and subsequently, the first half of 2017 experienced a major alt run, with the Altcoin Season Index reaching 100. Currently, a similar pattern seems to be in development; the ALT/BTC ratio has been down for four years, the Relative Strength Index (RSI) is significantly oversold, and the Moving Average Convergence Divergence (MACD) has just turned green after 21 months. It appears that the downtrend touched bottom in Q4 2025.

When analyzing both the technical indicators and broader market context, these forthcoming token unlocks could inject more liquidity into altcoins. However, the key remains: Which altcoins will experience the most significant supply shock?

Altcoins in Focus: Major Token Unlocks on the Horizon

This week, over $657 million in token unlocks is set to take place. However, the nature of these unlocks varies: one-time unlocks, such as those for Hyperliquid (HYPE) and APT, will flood the market all at once, while others like SOL, TRUMP, and DOGE will see gradual daily releases of over $1 million.

Notably, one significant player is Hyperliquid [HYPE], which will release nearly $330 million in HYPE tokens. At the current market valuation, this translates to about 12.7 million HYPE tokens becoming available.

HYPE
Source: DeFilLama

On the on-chain side, Hyperliquid appears well equipped to manage this influx. As per CoinGlass data, the open interest (OI) for Hyperliquid stands at $8.79 billion, surpassing a 24-hour trading volume of $7 billion, with a total value locked (TVL) of $4.30 billion. This positions it as the leading decentralized exchange (DEX) token, indicating a robust buying interest.

Combined with the technical indicators, this situation may usher in more capital flow to altcoins. If this trend persists, next week might finally witness the Altcoin Season Index breaking out against Bitcoin, potentially signaling the commencement of the next altcoin cycle.

In Conclusion

As we look ahead, the implications of these token unlocks can reshape the landscape for altcoins. Investors should keep a keen eye on these developments, as they may signify pivotal moments in the ongoing evolution of the cryptocurrency market.