Previously, a strong move in bitcoin often sparked growth across the entire crypto market. Now the picture has changed: capital remains in BTC much longer, and there is no mass inflow of funds into altcoins yet.
The Trend of Capital Flow From Bitcoin to Altcoins Has Practically Disappeared
CryptoQuant CEO Ki Young Ju believes that the old market model is gradually ceasing to work. According to him, the capital flow from bitcoin to altcoins has almost come to a halt.
Ki Young Ju refers to CryptoQuant statistics. According to the data, altcoin trading volumes in BTC pairs have dropped to levels not seen since 2021. This is noticeably different from previous cycles, when BTC was often used as the main asset for moving into riskier coins.
Aggregated altcoin trading volume in BTC pairs. Source: CryptoQuant.
The calculations exclude the largest market representatives, including Ether (ETH), XRP, BNB and Solana (SOL). The main focus is on second-tier altcoins and smaller projects that are traded in bitcoin pairs on centralized exchanges.
This segment used to be among the first to react to capital inflows after BTC growth. During the 2017 and 2021 cycles, interest in such assets surged, but now the statistics do not show comparable activity. Volumes remain noticeably below levels typical of previous market phases.
“Perhaps the era when altcoins grew simply because bitcoin was rising is already over,” said Ki Young Ju.
Capital in Altcoins Is Concentrated in a Few Tokens
A group of leaders is increasingly standing out in the altcoin market. Excluding bitcoin and stablecoins, its capitalization is estimated at about $600 billion, with about $483 billion accounted for by just the ten largest projects. For comparison, during the previous bull cycle, capital was distributed much more widely. Now, most liquidity is concentrated in a limited number of coins, while the rest of the market attracts significantly less attention from investors.
The largest altcoins control most of the market’s capital. Source: TradingView.
At the same time, the number of major projects is also shrinking. According to CoinMarketCap, in 2021, about 106 altcoins had a capitalization above $1 billion. By mid-2026, there were about 50 such projects left.
According to Ki Young Ju, this is another sign that investors have become much more selective. Instead of buying the whole market en masse, capital is increasingly directed to a limited number of leaders.
See Also: Fresh Crypto Market Overview for June 23: TurboFlow Raised $6 Million, Ethlabs Launched, Enso Opened Tokenized Assets
He separately noted that the market is gradually moving away from the era of so-called “narrative” altcoins, which grew mainly due to hype.
Now more attention is being paid to projects with working products and a clear economic model. Among such areas, he highlighted DeFi protocols with real revenue, stablecoins, tokenized real-world assets (RWA), and AI agents.
In his opinion, the next cycle for altcoins will be different from previous ones. Instead of broad market growth, investors will likely bet on projects that can attract users and solve specific problems.
The Rebound in Bitcoin Dominance May Have Delayed Altseason
Another obstacle for altcoins remains the growth of bitcoin dominance.
The BTC.D indicator recently bounced off the 100-week exponential moving average and the lower boundary of the ascending channel. Both zones are now near 58.75%.
For many market participants, this is a signal that money continues to concentrate in bitcoin.
Weekly chart of bitcoin dominance (BTC.D). Source: TradingView.
If the current trend continues, the indicator could rise to the upper boundary of the channel around 60%.
Such a move would mean a further strengthening of BTC positions relative to the rest of the market and could delay the start of a full-fledged altseason even further.
A similar assessment is given by analyst Rekt Capital. He noted the bullish divergence on the bitcoin dominance chart and believes that this signal still favors BTC.
Weekly chart of bitcoin dominance (BTC.D). Source: TradingView/Rekt Capital.
A bullish divergence occurs when the indicator sets new lows, but the relative strength index (RSI) starts forming higher lows. This usually indicates a weakening of the downward momentum.
However, Rekt Capital does not expect a strong and prolonged rise in dominance. In his opinion, the indicator has already lost its long-term uptrend, so the current rise may be just a temporary recovery after the breakout.
If this scenario plays out, BTC.D could fall to the 200-week EMA, which is now around 57%.
