The cryptocurrency market has seen significant fluctuations this October, with altcoin market capitalization declining by an additional 15%, and the month is not yet concluded. Will this downturn deepen before the end of October?
Recent data and analyses provide insights for investors to evaluate risks and opportunities during this precarious time.
Sponsored
Over 70,000 Altcoin Inflow Transactions Could Deepen the Decline
The decline is not merely a result of short-term volatility; it also indicates increasing sell pressure and waning demand from investors.
A clear signal is the marked rise in the number of altcoins being sent to exchanges, which has reached its peak level this year.
Data from CryptoQuant reveals that the 7-day average of altcoin inflow transactions has exceeded 70,000. In early 2025, similar inflow spikes were associated with significant price drops in Bitcoin and altcoins.
“Transactions sending alts to exchanges have just reached a new year-to-date high, signaling increased sell pressure — or traders preparing for the next significant rotation,” noted Coin Bureau .
A higher volume of altcoins moving to exchanges might indicate redistribution rather than immediate price drops. Nonetheless, stablecoin data is crucial for understanding market sentiment.
Sponsored
Weakening Stablecoin Inflows Signal Diminished Buying Power
CryptoQuant’s Stablecoin CEX Flow data indicates that while netflow remains positive, it has sharply declined since mid-September and is nearing zero in October.
Fewer stablecoins being transferred to exchanges suggests a reduction in potential buying power. This, combined with the surge in altcoin supply on exchanges, could heighten downward pressure.
In late 2024, a similar decrease in stablecoin netflow preceded a widespread market correction.
Sponsored
The USDT.D index, which measures Tether’s dominance in total market capitalization, supports this observation. It has risen above 5%, indicating that stablecoins are not being utilized to bolster altcoin prices.
According to Altcoin Vector, recent liquidation events have heightened USDT dominance — a trend that historically aligns with sharp declines in altcoins.
“The delicate balance between Alts and liquidity has faltered. The recent deleveraging event has elevated USDT dominance, and historically, every such occurrence has coincided with steep declines in Alts,” commented Altcoin Vector .
Sponsored
Signs of a Potential Bottom Amid Broader Weakness
These indicators imply that altcoins may face challenges in quickly recovering from the substantial liquidation event that recently impacted the market.
Nonetheless, technical analyst Merlijn suggests that altcoins might be nearing a cycle bottom. His perspective is grounded in the MACD cross signal, which has appeared only three times in the past eight years — each occasion marking the onset of an altcoin supercycle.
History indicates that such moments have frequently led to robust rallies.
Despite this, optimism must be balanced with caution. Positive technical signals can emerge during the darkest market phases, yet current bearish indicators require attention.
Investors should carefully consider both perspectives as October progresses — a month typically associated with volatility and pivotal changes.
