Altcoins Under Pressure as Traders Shift to BTC, ETH & XRP
Crypto sentiment has slid into the fear zone, with the Crypto Fear & Greed Index dropping from neutral to 44 (Fear). Traders are adopting risk-off strategies and rotating funds into large-cap cryptocurrencies like Bitcoin (BTC), Ether (ETH) and XRP. On-chain data from Santiment shows capital flowing out of small-cap altcoins back into major tokens.
Over the past month, BTC has fallen 5% while ETH rose 9%, and the total crypto market cap stands at $3.82 trillion. Despite an Altcoin Season Index reading of 56, many altcoins remain under pressure. Bitfinex analysts warn that a broader altcoin rally may be delayed until new spot crypto ETFs launch later this year.
Some traders, including @rektfencer, view the current pullback as a final “shakeout” that could pave the way for renewed altcoin momentum. However, technical analysts caution that Bitcoin’s indecisive price action could trigger further short-term swings. The longer-term market outlook now hinges on upcoming ETF approvals and the dynamics of the next halving cycle.
Bearish
The unified news points to increased risk aversion and fund rotation from small-cap altcoins into established large-cap cryptocurrencies like BTC, ETH and XRP, driving further down altcoin prices in the short term. The drop in the Crypto Fear & Greed Index to ‘Fear’ and stagnant altcoin season metrics suggest subdued buying interest until major spot ETFs launch. This dynamic is likely to prolong bearish pressure on altcoins in the coming weeks. However, traders anticipate a potential rebound once ETF approvals arrive, indicating a possible bullish turnaround in the longer term as new capital flows back into altcoins. Meanwhile, Bitcoin’s decisive action around ETF expectations could spark renewed volatility, affecting market stability across all crypto assets.