Altcoins Experience Significant Capital Outflows Amid Increased Risk Aversion
The cryptocurrency market is witnessing a notable shift in investor sentiment, with altcoins facing significant capital outflows due to increased risk aversion. As a result, rallies are becoming shorter, and altcoin futures open positions have declined by 55% since October, resulting in the closure of over $40 billion worth of positions.
Investor Preference for Established Cryptocurrencies
Investors are increasingly favoring larger, more established cryptocurrencies, such as Bitcoin and Ethereum, as macroeconomic factors like tariffs and interest rate expectations drive cryptocurrency price volatility. According to Jake Ostrovskis, head of OTC trading at Wintermute, the trend can be attributed to waning market enthusiasm and the diversion of speculative capital from individual investors to other sectors.
Market indicators remain volatile and bearish, with altcoins underperforming top tokens, liquidity stagnating, and retail speculation shifting to stocks and emerging technology themes like AI and robotics. The CoinMarketCap Altcoin Season Index shows that crypto assets outside the top 10 by market capitalization have significantly underperformed major tokens over the past 90 days.
Market Outlook and Expert Insights
Cosmo Jiang, general partner at Pantera Capital Management, described the overall market outlook as weak, stating that “according to most indicators, the market is still volatile and bearish. Bitcoin must lead the way for a healthy recovery.” Additionally, Jasper De Maere, strategist at Wintermute, reported that altcoin liquidity remains stagnant as capital looks for new speculative opportunities.
De Maere noted that while cryptocurrencies were the main area of speculation in 2021, individual investors’ interest has shifted to stock market topics like space, quantum physics, robotics, and artificial intelligence. According to Wintermute’s over-the-counter crypto trading report, the average uptrend in altcoins lasted just 20 days in 2025, compared to 40 to 60 days in previous years.
For more information on the current state of the cryptocurrency market and the shift in investor sentiment, visit https://crypto.news/altcoins-face-extended-downturn-investors-favor-btc/
