3 Reasons Why the Altcoin Winter Could Last Longer

The altcoin winter may persist due to major challenges like low liquidity, Bitcoin’s dominance amid geopolitical instability, and severe market dilution.

While a few major altcoins may still have potential in the future, the overall picture suggests that this difficult phase is unlikely to end soon. Here are the top three reasons why.

#1. Trading Data Shows Investors Still Ignore Altcoins

According to CryptoQuant, the “1-year Cumulative Buy/Sell Quote Volume Difference for Altcoins” is currently at negative $36 billion and shows no sign of recovery.

This metric reflects the gap between buy and sell quote volume for altcoins. A negative $36 billion reading means that, over the past year, the total sell quote volume of altcoins has exceeded the buy quote volume by $36 billion.

1-year Cumulative Buy/Sell Quote Volume Difference for Altcoins. Source: CryptoQuant

Investors are selling altcoins more than buying. This trend could stem from risk-averse sentiment or the belief that altcoins are no longer attractive in the short term.

“Even though Bitcoin is enjoying a bull run, altcoins are behaving like it’s still winter. Unless this metric starts rising again, expecting a full-blown altseason or altcoin FOMO might just be wishful thinking,” analyst Burakkesmeci commented.

Therefore, to confirm the beginning of an altcoin season, we need to see this metric rise or turn positive.

#2. Geopolitical Tensions Reinforce Bitcoin’s Dominance

Global geopolitical tensions, most recently the Israel-Iran conflict, have created an unfavorable environment for altcoins.

When Israel attacked Iran, Bitcoin’s price dropped—but altcoins suffered even heavier losses. On the other hand, when Bitcoin rallies, it attracts most of the investor attention and capital, leaving altcoins overshadowed. This pattern has persisted since early this year.

As a result, Bitcoin Dominance (BTC.D) rises in both scenarios. In fact, BTC.D has posted six consecutive green weekly candles and is holding above 64%.

Bitcoin Dominance (BTC.D). Source: TradingView

Some analysts argue that altseason might have started in June, if not for the Israel-Iran conflict.

“Altcoin season almost started… Ethereum outperformed BTC for ~1 week and Israel-Iran war and maybe WW3 started. Now BTC dominance is near a 5-year high, being very far from altseason… Only thing we can do is wait, HOLD and hope. Stay strong everyone,” investor Gem Hunter commented.

Moreover, current geopolitical conflicts will unlikely be resolved within weeks or months. That means risk-averse sentiment will likely continue to dominate the market, putting altcoins at a disadvantage.

#3. Record Number of Altcoins Dilutes the Market

The third reason lies in the explosion of the number of altcoins.

According to CoinMarketCap, by June, the number of altcoins surpassed 17.34 million—an 850-fold increase compared to December 2021. Meanwhile, the altcoin market cap (TOTAL2) is $1.13 trillion, still 30% below its late-2021 peak.

Total Number of Cryptos Tracked. Source: CoinMarketCap.

This explosion has created an overly fragmented market. Capital inflow is decreasing and spreading too thin across too many assets. Only a few major altcoins manage to attract investor attention.

Even if an altseason does occur, it will likely be highly selective. Coins like Ethereum, Solana, and XRP may benefit, but most smaller altcoins will struggle to break out.

This dilution lowers the chances for new or lesser-known projects to succeed. It also makes investors more cautious when choosing which altcoins to back.

As a result, even in the most optimistic scenario, most altcoins will still be left behind.