Altcoin rallies shrink to 20 days in 2025 as retail speculation shifts away
Rallies for smaller cryptocurrencies lasted an average of 20 days in 2025, down from 40–60 days in prior years, according to Wintermute’s OTC trading analysis. Open interest in altcoin futures has fallen about 55% since October, wiping out more than $40 billion in market exposure. Retail speculative flows are moving from small-cap tokens into meme stocks, prediction markets and AI-related equities, while larger cryptocurrencies such as Bitcoin (BTC) and Ether (ETH) attract macro-driven bets. Key Wintermute figures cited: Jake Ostrovskis (head of OTC trading) and Jasper De Maere (desk strategist). Market drivers recently include tariff policy and shifting interest-rate expectations; a single day of selling in October erased $19 billion from digital assets. CoinMarketCap’s Altcoin Season Index shows smaller tokens underperforming top-10 assets over the past 90 days. Increased competition from prediction markets (Polymarket, Kalshi) and new retail products from Robinhood and CME are drawing speculative capital. The report signals lower liquidity and shorter momentum cycles for altcoins, raising caution for traders relying on sustained small-cap rallies.
Bearish
The evidence points to a bearish outlook for small-cap altcoins. Key indicators: a 55% drop in altcoin futures open interest since October (>$40bn erased), shorter rally durations (20 days vs 40–60 previously), and outflows of retail speculation to meme stocks, prediction markets and AI equities. Reduced liquidity and faster fade of momentum increase volatility and lower the probability of sustained altcoin rallies, making short-term pump-and-dump cycles more likely and longer-term recovery dependent on renewed capital inflows or macro tailwinds. Historical parallels: the 2018–2019 post-bubble period and 2022 crypto drawdown both saw diminished retail appetite, collapsing altcoin liquidity and prolonged underperformance vs BTC/ETH. Traders should expect: higher idiosyncratic risk, tighter spreads for low-liquidity tokens, larger slippage on entries/exits, and potential shorting opportunities around faded narratives. Longer term, if prediction markets and AI equities continue to absorb speculative capital or macro conditions favor safe-haven flows into BTC/ETH, altcoin performance may remain muted until fresh liquidity or a convincing macro-led crypto rally emerges.