Market Structure Shift Puts Altcoins Under Pressure
CryptoQuant analyst Darkfost has highlighted a structural shift in the altcoin market, with investors holding non-majority crypto assets facing widespread difficulties. Data shows that 83% of altcoins on Binance are now trading below their 50-week moving average, signaling a deep correction phase across the sector.
Bitcoin's Dominance Continues to Weigh on Sentiment
Although Bitcoin has declined to about 46% of its all-time high of $126,000, its market dominance remains strong. The prolonged downtrend in BTC is placing significant downward pressure on altcoins, especially in the current macroeconomic environment marked by high uncertainty.
Converging Factors Trigger Liquidity Crunch
Escalating geopolitical tensions, particularly between the U.S. and Iran, along with the Federal Reserve's hawkish tone in its latest FOMC meeting, have created a challenging environment for high-volatility assets. Limited liquidity combined with a continuous influx of new altcoins is further intensifying the market correction.
Historical Data Reveals Market Dynamics
Since the end of the 2023 bear market, altcoins have remained underperforming. On February 7, 2025, over 92% of Binance altcoins dropped below the 50-week moving average — a record level. This sharply contrasts with early 2024 when only 6% (March) and 7% (December) were below this key technical level, reflecting a fundamental shift in market behavior.
Investment Approach: Strategic Adaptation to the New Normal
In the current environment, achieving outperformance requires a combination of deep market analysis and disciplined asset selection. Investors should focus on structural market shifts and adopt more adaptive, structured investment strategies to navigate the prolonged correction cycle.