Matrixport Research: Why Is the Altcoin Bull Market Absent? Supply Pressure and Token Unlocks Emerge as Key Variables
- Core View: In the current crypto market cycle, altcoin performance has been under sustained pressure. The core reasons are weak retail demand and persistent token supply pressure, which have significantly weakened the traditional transmission mechanism of "Bitcoin's rise driving altcoin catch-up rallies."
- Key Factors:
- Market Structure Shift: This market cycle is Bitcoin-dominated, with its market dominance remaining high. The overall market capitalization of altcoins has failed to reach the highs of this cycle, significantly underperforming Bitcoin.
- Significant Supply Pressure: Since August 2024, approximately $99 billion worth of tokens have been unlocked and entered circulation. Early investors have been continuously selling, creating sustained downward pressure on prices.
- Weak Demand Side: Retail participation remains persistently low. The market lacks strong new narratives and real-world application value to support it, weakening upward momentum.
- Signals for Phased Rebound: Large-scale token unlock windows (e.g., approximately $4.7 billion next week) may temporarily improve liquidity and trigger rebounds. However, this cycle's rebound started relatively late, and its impact may be diminished.
- Market Structure Indicators: The deviation of the total altcoin market cap from its 90-day moving average can serve as a reference. Current selling pressure may be approaching an over-released zone.
Over the past year, the anticipated altcoin market rally has failed to materialize. In previous cycles, Bitcoin's rise typically led to capital spillover, gradually spreading to the altcoin sector. However, in this cycle, this transmission mechanism has significantly weakened. Retail participation has remained persistently low, with many projects lacking compelling new narratives to drive the market or failing to provide solutions with real-world application value. Simultaneously, ongoing selling by early investors and the new supply from token unlocks are continuously weighing on the market. Against this backdrop, the overall performance of altcoins remains under pressure, and investor sentiment is generally subdued. Nevertheless, there are still some assets within the market that exhibit periodic strength, and such opportunities can often be identified through certain market structure signals.
Sustained Supply Pressure: Altcoin Upside Momentum Remains Constrained
Since October 2025, although Bitcoin has experienced periodic pullbacks, its market dominance has not declined significantly and has recently trended higher again. This market movement appears more like a Bitcoin-led rally, with altcoins following intermittently. Meanwhile, an increasing number of companies adopting treasury allocation strategies continue to accumulate Bitcoin, maintaining its structural demand.
In contrast, altcoins face more pronounced supply pressure. Continuous selling by early investors, coupled with new circulating supply from token unlocks, frequently caps price rebounds with selling pressure. Since August 2024, approximately $99 billion worth of tokens have been unlocked and entered circulation, creating a persistent supply shock for the market.
As retail enthusiasm cools, the impact of supply-side factors has gradually become a key variable dominating price trends. This also explains why, in the bull market from 2024 to 2025, altcoins not only underperformed Bitcoin but also failed to reach their previous cycle highs in terms of total market capitalization.
Unlock Windows and Market Structure: Periodic Rebound Opportunities May Still Arise
Historical experience shows that large-scale token unlocks often improve market liquidity in the short term and boost trading activity. In many cases, altcoins experience periodic rebounds around unlock windows. This is driven by both increased absorption capacity due to higher trading volume and capital reallocation within the sector.
Next week is expected to see approximately $4.7 billion in token unlocks, making it the third-largest unlock week since August 2024. Historical data indicates that during similar-scale unlock windows, the crypto market often rallies in the weeks leading up to the unlock, with total market capitalization peaking shortly after the unlock event.
However, the current rebound appears to have started only about a week in advance, suggesting its influence may be weaker than in previous instances. This round's unlock volume is concentrated in a few protocols, with the vast majority coming from the WhiteBIT Coin (WBT), the platform token of the European crypto exchange WhiteBIT. Although the token's Fully Diluted Valuation (FDV) is around $16.6 billion, its average daily trading volume is only about $74 million. This implies that relatively limited trading activity could still have a disproportionate impact on price volatility.
Synthesizing historical experience, a practical market indicator is the deviation of the total altcoin market capitalization from its 90-day moving average. When the total market cap exceeds the 90-day moving average by more than 50%, the market typically enters a period of overheating. Conversely, when it falls below the 90-day moving average by about 30%, tactical rebounds are more likely. Current market structure suggests that selling pressure on altcoins may be gradually approaching an overextended zone.
Overall, the altcoin market is at a critical juncture. Structurally, the sector still faces dual pressures: on one hand, overall retail demand remains weak; on the other, token unlocks and early investor selling continue to suppress the supply side. This structural characteristic has significantly weakened the traditional transmission path of "Bitcoin's rise driving a catch-up rally in altcoins" during this cycle.
Some of the views above are from Matrix on Target. Contact us to get the full Matrix on Target report.
Disclaimer: The market carries risks, and investment requires caution. This article does not constitute investment advice. Digital asset trading can be highly risky and volatile. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions based on the information provided herein.
