The cryptocurrency market has evaporated 60 billion USD: What should investors be aware of?

Selling pressure is sharply increasing on altcoins, as Bitcoin increasingly separates from the rest of the market and dominates liquidity. Currently, only 17 altcoins have recorded performance exceeding BTC — a rather modest number, raising concerns that the market may soon enter a correction phase. Unless the ETH/BTC pair demonstrates clear strength, enough to trigger a new wave of capital rotation back to altcoins, this negative trend will be hard to reverse.

In the past 24 hours, the cryptocurrency market has experienced a significant drop, wiping out 60 billion USD from the total market capitalization after reaching a peak of 3.92 trillion USD. As of the time of writing, this figure has retreated to 3.86 trillion USD, according to data from CoinMarketCap.

Behind this adjustment is a clear signal: money is gradually flowing out of altcoins. If this trend continues, the market may face a deeper and broader correction in the near future.

Bitcoin is increasingly decoupling from altcoin

The correlation heatmap developed by Alphractal – a specialized tool for measuring the degree of co-movement between altcoins and Bitcoin (BTC) – is recording a distinct phase shift, raising concerns that the decline of altcoins may continue and deepen further.

At the time of writing, the correlation index is approaching 0, reflecting an increasing divergence between the price fluctuations of Bitcoin and the rest of the altcoin market.

History has recorded that such divergence phases are often an early signal of strong corrections in the altcoin group. This means that only a few tokens may be able to maintain their green — if any — but the growth margins are also very modest, while the majority of altcoins will face stronger volatility.

Source: AlphractalMoreover, the current weakness of altcoins may also indicate that Bitcoin is preparing to lead the market into a new cycle of volatility, where the dominance of BTC becomes increasingly apparent.

Altseason: Good for Bitcoin, but not necessarily good for the market

Altseason – or the season of altcoins – is the time when market money primarily flows into cryptocurrencies other than Bitcoin, often leading to impressive price surges. However, according to the Altseason Index – a tool for measuring the dominance of altcoins – currently only 17 altcoins have outperformed Bitcoin in the past 60 days (as of the time of writing).

This modest figure indicates that the altcoin season has not truly begun, as the majority of liquidity is still concentrated in a few key assets. This pattern may signal a rotation of capital back into Bitcoin, reviving the familiar scenario that the market has witnessed before: Altcoins rise to the sky in a short time ( represented by the green line ), but then quickly weaken and return to the green zone – an area commonly referred to as the "Bitcoin season."

Source: AlphractalAt the same time, technical signals from Alpha Quant also indicate a bleak outlook for altcoin, as this system has just issued a sell signal on the chart. History has shown that each time the yellow line appears, it precedes a deep market correction – and this has happened 5 times in a row in the past.

Source: AlphractalIf this trend continues to repeat, the opportunity for a sustainable growth surge of altcoin is very slim. Even the 17 altcoins that are temporarily outperforming may face difficulties as the rest of the altcoin market faces increasing pressure.

Things to Watch Right Now

Although a series of technical indicators are warning of the risk of a large-scale altcoin sell-off, the movement on the ETH/BTC chart reveals a glimmer of hope for a potential recovery.

History shows that whenever the ETH/BTC exchange rate tends to rise — like now — it is usually a signal that capital is gradually leaving Bitcoin to flow into Ethereum and other altcoins.

Source: TradingViewIf this upward momentum is maintained, altcoin still has a chance to break out again. On the contrary, if the ETH/BTC exchange rate reverses and weakens, this will be a confirming sign that the altcoin market is entering the final stage of a deep and prolonged sell-off.

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