Analyses and knowledge point out that the crypto market is experiencing its most lively altcoin season since early 2025, with many altcoins outperforming Bitcoin. Nevertheless, behind this pleasure lies a paradox. Most retail buyers stay uneasy as their portfolios present little to no revenue.
This text outlines the primary causes behind this example.
Altcoin Market Cap Rises however Dominance Shrinks
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TradingView knowledge reveals that the TOTAL3 market cap (excluding BTC and ETH) reached a brand new excessive of over $1.1 trillion in September.
But the share of OTHERS (excluding the highest 10) has declined since 2022, now standing at simply 8%.
In previous cycles, resembling 2017 and 2021, TOTAL3 and OTHERS.D rose collectively. That development mirrored capital flowing not solely into large-cap altcoins but additionally into mid-cap and low-cap ones.
The present divergence reveals that capital is concentrated in stablecoins and a handful of top-10 altcoins resembling SOL, XRP, BNB, DOG, HYPE, and LINK. Smaller altcoins obtain far much less liquidity, making it laborious for his or her costs to return to ranges the place buyers beforehand purchased. This creates a state of affairs the place just a few win whereas most face losses.
Retail buyers additionally are inclined to diversify throughout many cash as an alternative of including measurement to prime altcoins. That explains why many portfolios stay stagnant regardless of a broader market rally.
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“Place sizing is every little thing. Many individuals maintain 25–30 tokens directly. A 100x on a token that makes up just one% of your portfolio received’t meaningfully change your life. It’s higher to make just a few high-conviction bets than to overdiversify,” analyst The DeFi Investor stated.
Altcoin Index Surges however Investor Sentiment Stays Cautious
The Altcoin Season Index from Blockchain Middle now stands at 80 factors. This means that over 80% of the highest 50 altcoins outperformed Bitcoin up to now 90 days—a clear signal of altcoin season.
Nevertheless, the Concern & Greed Index is at 52, a impartial stage reflecting warning and no clear directional bias.
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Historic knowledge reveals that the 2024 rally drove each indicators greater. At the moment, the Altcoin Season Index climbed above 75, whereas the Concern & Greed Index soared previous 80, displaying excessive greed. The parallel rise mirrored investor confidence as capital rotated strongly into altcoins. However that’s not occurring now.
Retail warning appears to stem from classes realized in previous cycles, the place altcoins spiked then collapsed quickly on account of FOMO and mass sell-offs. New elements resembling Fed fee choices, tax impacts, and geopolitical tensions might also contribute to hesitation.
“This isn’t an ‘everybody will get wealthy’ market anymore. It’s participant vs. participant, particularly with the present macro surroundings,” analyst Luca emphasised.
The Variety of Altcoins Has Elevated Tenfold Since 2021
Though the TOTAL3 market cap is close to its 2021 peak, the context has modified dramatically. CoinMarketCap experiences that in 2025, greater than 21 million altcoins can be tracked—100 instances greater than the roughly 20,000 cash in 2021.
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Dune knowledge highlights the token explosion from 2017 to 2025, with distinctive tokens skyrocketing, particularly on Ethereum, Solana, and Base.
This creates a way more selective surroundings. In 2021, buyers might revenue extra simply with fewer cash as a result of competitors was decrease. With tens of hundreds of thousands of tokens spanning DeFi, meme cash, and AI tokens, choosing the right one is as troublesome as discovering a needle in a haystack.
“Again in 2021, the altcoin universe was small and nearly each coin caught a rally—even the junky ones. Now in 2025, the sport has modified. There are a whole lot of instances extra altcoins. With such an oversupply, the percentages that your random small-cap will magically 100x are close to zero,” analyst Nonzee defined.
Most new tokens fail rapidly on account of low liquidity, rug pulls, or intense competitors. Retail buyers, who typically unfold capital throughout many small-cap tokens, now face greater dangers. This ends in both losses or very modest returns, whilst the general market surges.
These three elements clarify why the September 2025 altcoin season feels incomplete. To beat this, buyers might have deeper analysis, a deal with essentially robust initiatives, and a reconsideration of extreme diversification.
